The thing about edge
- Thread starter kut2k2
- Start date
Everyone has his/her own edge! and they have lot, not just one!
Edge is what you have, and others do not have.
since God creates people uniquely. there is no two exact peoples in the world, even twins!
people often do not know who they are, or what they have. they try to cat-copy, that will not work.
some people are very sensitive, some people are very patient, some people are quick in number, .... those are edges!
if you compete with others with others people's edge, of course you are losing.
smart people just know who they are, also know their edges, and avoid their weakness as possible as they can, even turn weakness into strength.
there is a saying in wall street "someone's trash is others treasure". to extend it further, you know you have edges.
once in world war II, there are two buddies, they are friends. one is disabled, he often complain God do not love him and treat him unfairly. another one is healthy and strong, he feel blessed by GOD. so when the war erupted, the healthy one was called into army. after the war ended, the disabled guy found his healthy strong buddy died on the battlefield, and he still lived even married with his friend's beautiful girlfriend, and become a very famous novel writer!
Everyone has his/her own edge, go find it!
happy trading!
Edge is what you have, and others do not have.
since God creates people uniquely. there is no two exact peoples in the world, even twins!
people often do not know who they are, or what they have. they try to cat-copy, that will not work.
some people are very sensitive, some people are very patient, some people are quick in number, .... those are edges!
if you compete with others with others people's edge, of course you are losing.
smart people just know who they are, also know their edges, and avoid their weakness as possible as they can, even turn weakness into strength.
there is a saying in wall street "someone's trash is others treasure". to extend it further, you know you have edges.
once in world war II, there are two buddies, they are friends. one is disabled, he often complain God do not love him and treat him unfairly. another one is healthy and strong, he feel blessed by GOD. so when the war erupted, the healthy one was called into army. after the war ended, the disabled guy found his healthy strong buddy died on the battlefield, and he still lived even married with his friend's beautiful girlfriend, and become a very famous novel writer!
Everyone has his/her own edge, go find it!
happy trading!
It is not. It is a requirement for edge, but it is not the edge.
Example: In the queues you see at airports: the expected service rate is higher than the expected arrival rate of customers, yet there are queues. If positive expectation was enough, as you stated, there would be no queues.
If I were to guess people might think that there are queues because expected service rate is lower than expected arrival rate, which is not correct.
Neither. It is important to the losing trader to believe that he is doing everything possible to succeed. If he doesn't succeed (which is likely), then it has to be due to "big money" or "market makers" or "brokers" or "the government" or "HFT" or whatever. He obviously has no edge, but if he were to acknowledge the existence of same he would also have to acknowledge the fact that he has none and therefore assume the responsibility for his own failure, and that's not an option. This also accounts for the contention that if one can't do or understand what somebody else claims to be able to do or understand, then they must be lying (hence further the demands for "proof" that someone can do what he himself cannot).
Trading forums are a virtual Petri dish of neuroses.
Perhaps someone on ET should start a page about edge on http://en.wikipedia.org/wiki/Special:Search/intitle:Edge . LOL
So a winning trader needs three things:
1) a trading strategy with positive expectation, an arguably rare quality.
2) the ability to overcome the psychological challenge of a low winrate, a not-rare-enough component of many PE strats.
3) the application of good money management, of which many traders are abysmally ignorant.
No wonder most traders fail.
There's a slightly sarcastic tone here, which I assume is on purpose and is done to lighten things up, but I disagree with one and two. A trading strategy requires predictable outcomes and consistent profits. As long as one keeps it simple, this is not difficult if one is willing to do it manually. Unfortunately, since charting software became available to the retail trader fifteen years ago, the computer backtest has become a default, even though there is a serious disconnect between backtested results and what one finds in real-time trading or even forwardtested sim (one finds after a computer backtest that when he begins trading "for real" that he's never even seen this stuff before). Second, if there's no low winrate, there's no psychological challenge. It's a moot issue.
As to the last, yes, largely because traders don't understand risk in the first place, much less the various types of risk. But if one has a high winrate and a high P:L ratio, money management becomes more of a technical issue than a psychological one: where to enter and with how much, where to scale in or out, where to exit and how. And much of this depends on bar interval, timeframe, and style. But one's pants need not be twisted into a knot over it. It's not that much different from the process of putting together a budget. Granted a lot of youngsters have no idea how to do that either, but it's not what one would call monumentally difficult.