What is an edge?

You can take all the methods and all the typical trader stuff and throw it all out the window.

The edge is order flow. If you're not doing anything trading on your own, go work as an assistant for a hedgefund.

Everything you'll ever read or study about trading will be meaningless.

That my friend is the edge but only a few % of the street has it.
 
This contradicts reality.
There are plenty of full time, retail, traders here
making money without orderflow knowledge.

Yet, they have an "edge" of some sort.

I know nothing of order flow.
I make money. :D

peace

axeman


Originally posted by Omartrading
You can take all the methods and all the typical trader stuff and throw it all out the window.

The edge is order flow. If you're not doing anything trading on your own, go work as an assistant for a hedgefund.

Everything you'll ever read or study about trading will be meaningless.

That my friend is the edge but only a few % of the street has it.
More...
 
House edge, something only delta neutral traders have, no such thing for directional traders

Edge as it is commonly used, better than random.

If what you're doing is better than a coin toss, then you can call it an edge.

Most misused word in trading vocabulary

Best used to sum up experience+discipline+mkt knowledge+money management+etc.

Lost edge means <50% hitrate with 1r:1r or it's mathmatical equivalent.

Narrow edge means even after commissions and spread.

Occasionally random entry and exit has a tremendous edge.
 
if in the long run you make more money than you lose, you do have an edge.
'long run' is vague. so with a statistically valid number of trades you should come out ahead if you have an edge.
that is ahead in $, not more winners than losers or other meaningless ratio. you must make more than your cost (and that's all your costs).
otherwise you are financing a hobby (or are in your training period, which is fine).

previous posts talked about how to get that.
an edge might be temporary too, keep that in mind. during bubblemania, many had an edge. nothing impressive to be honest, but still it was an edge. statistically you could make more than your costs (and it was easy too). that edge died. it's an example.

I don't think it's too difficult to get an edge. There are so many ways to have one. Indeed the more difficult part is to handle it. And most people are not cut for this. I agree with Nitro. Just like not everyone is cut to be a car racer or surgeon or actor or teacher or fisherman. Trading is not rocket science. However, it does not mean everyone can just make it only because they want to.

so I think the % of profitable traders is very small only because too many do try while they are not prepared for it, don't have the psychology for it. the small % having an edge does not really represent the actual difficulty of the profession.

it is also arguable that the number of bankrupt traders is comparable to the number of small companies going broke their first, second and third year. and just like companies, if you survive that long, you are likely to be OK for good.

to continue the comparison, companies do fail because :
- undercapitalized
- addressing the wrong market
- inefficient organization and methods
- and, true, simple bad luck

working very hard, and believing in yourself is just not enough.

tntneo
 
A friend recently asked me why I thought that the
vast majority of people who try trading fail.

I responded with the questions:

How many people do you know of, that could lose money
almost every day for a year straight without giving up?

How many people would try this if they knew that they
could lose money almost every day for a year,
and still NEVER EVER "get it"???

Thats one hell of a gamble.

To succeed, you need:
1) Tenacity!!!
2) Capital to survive 1-2 years of losses
3) Emotional control, (while in a trade)
which only comes with practice
4) The confidence to prevent all those losses from
emotionally destroying you.

And after that, your still not guaranteed to succeed.
Thats why I believe most fail.

peace

axeman


Originally posted by tntneo

to continue the comparison, companies do fail because :
- undercapitalized
- addressing the wrong market
- inefficient organization and methods
- and, true, simple bad luck

working very hard, and believing in yourself is just not enough.

tntneo
More...
 
I think your dead on with this quote.

Which brings up another interesting question.

As a new trader, how do you think your going to beat
all these guys ahead of you with YEARS of fulltime
experience? :D

You ARENT! Ding ding ding... thats why it can take years
of losses before you get "better" than the "break even"
traders, and finally become profitable.

peace

axeman


Originally posted by profitseer

Best used to sum up experience+discipline+mkt knowledge+money management+etc.
More...
 
Originally posted by axeman
I think your dead on with this quote.

Which brings up another interesting question.

As a new trader, how do you think your going to beat
all these guys ahead of you with YEARS of fulltime
experience? :D

You ARENT! Ding ding ding... thats why it can take years
of losses before you get "better" than the "break even"
traders, and finally become profitable.

peace

axeman
More...

truly good point. never thought of it that way...gotta get kicked around on the court before you can become a legend yourself...

PS - aphie, why don't you ask questions and listen instead of trying to lecture everyone on what you think should be working, when you, yourself really have no idea of what works and what doesn't?? i admire your enthusiasm, but without a little modesty you're gonna keep giving the rest of us your money while trying to tell us what it is that you think it is we should be doing...just my .02
 
Originally posted by randynutts
i cant read any of these. they wont let me in:(
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You can sign up for the 30 day free trial and read them or you can actually subscribe- its $20 a month. In either case you can cancel at any time.
 
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