What defines an "Edge".

[marketsurfer]

Hardly.

Again:

The edge begins with the knowledge one gains through his research and testing that a particular market behavior offers a level of predictability that provides a consistently profitable outcome over time (from Douglas).

Ok, let's see the evidence and results of your testing.

 

[dbphoenix]

Ok, let's see the evidence and results of your testing.

Read the journal postings I've been making for the past year here, including yesterday.

 

[lucysparabola]

Nitro summed this up way back in 2002 when asked what an edge is--- this is absolute brilliance---

It is glaringly obvious when you have it, and you get REAL worried everyday that it might be "taken away"...

nitro

http://www.elitetrader.com/et/index.php?threads/what-is-an-edge.10470/

Yeah, I have this fear in an exponentially irrational manner now. great quote.

When real statisticians apply the science to TA or price action-- the results indicate no edge. You just can't use these terms without backing up your words with the tests that prove them.

Indeed!

Ok, let's see the evidence and results of your testing.

Read the journal postings I've been making for the past year here, including yesterday.

You guys need to get a room. call your people and set it up already.

 

[marketsurfer]

Read the journal postings I've been making for the past year here, including yesterday.

Anecdotal and has nothing to do with testing, statistics or probabilities.

 

[dbphoenix]

Anecdotal and has nothing to do with testing, statistics or probabilities.

So test it, if it means that much to you. You have all the information you need. If you had done so a couple of months ago, you would have avoided calling a top 600pts too early.

 

[TooOldForThis]

A good place to start is edwardothorp.com The author himself makes nearly all of his publications available for free. I would suggest you start with his Mathematics of Gambling, especially chapter 1 "Introductory Statement" and Chapter 9 "Optimal Betting." You may need Chapter 8 "Mathematical Systems" to put chapter 9 in perspective, though I think you can take Chapters 1 & 9 together and get a good springboard for further study. You can find Mathematics of Gambling in 4 parts at the link below:

http://edwardothorp.com/id16.html

Thanks for the link. Edward Thorp is a pretty good definition of "edge". I heard him give a talk at a local APS physics conference when I was a physics grad student at U. Cal., Irvine. He taught there. My recollection is that at the time (perhaps 1985) he had made something less than $100 million but not by much. His book was "Beat the Dealer", about black jack. He made his money in the options market, with a new method of pricing them.

 

[redbaron1981]

Beat the dealer was about black jack. He also has Mathematics of Gambling and beat the market. The latter two I managed to obtain originals of from Amazon.

 

[zdreg]

Beat the dealer was about black jack. He also has Mathematics of Gambling and beat the market. The latter two I managed to obtain originals of from Amazon.

"originals"

if you got it back in the days the original book itself is probably one of your best investments/trades.
http://www.amazon.com/gp/offer-list...7818778&sr=8-1&keywords=beat+the+market+thorp

 

[zdreg]

So test it, if it means that much to you. You have all the information you need. If you had done so a couple of months ago, you would have avoided calling a top 600pts too early.

"You have all the information you need" you are a two of a kind in your responses. if you can't present the answer you put the onus on the other person to disprove your remarks.

 

[dbphoenix]

"You have all the information you need" you are a two of a kind in your responses. if you can't present the answer you put the onus on the other person to disprove your remarks.

Yes, it's up to whomever to determine whether or not the approach meets his needs. My results are irrelevant unless I'm going to commit myself to providing him with RT calls every day all day for the foreseeable future. And even if I did provide him with the calls, he'd be a fool to take them unless he had gone through an extensive verification process. In which case he wouldn't need me. Though I suspect that most traders don't even know how to conduct such a test but are embarrassed to admit it.

Each trader has to decide for himself whether he wants to be independent or a Gimmee. A lot of people are satisfied with being Gimmees, spending their lives in trading rooms or scrounging for tips on message boards. And if they're happy with that, why not? Life's short.