Beginnerjohn and NoDoji, welcome to my word of irrational trading. Existence is holtropic. "All" you have to do is see the future that coexists with the present and act upon it. My trading is absurd. Abstruse. Recondite. Nagual. Voudoun, perhaps. Many would-be traders already hear these trades as an itch in the ass, feel it as an hallucination of the bar moving before it moves, see it as the synesthetic smell of freshly printed money, taste it as the tang of a resonating gold Philharmonic flipped in the air to make a trading decision. Redneck, you are already quite mad, kindly tell them how it works for you.
What is an edge?
- Thread starter Dobbes
- Start date
RN, I must say that my trading knowledge seems to grow exponentially. I learned more in the past 2 weeks than I learned in the previous 6 months. Just this past week I learned the importance the concept you quote above. Answering the first question gives you a sense of positive expectancy, but answering the second question provides the finer edge.
And FWIW, I believe positive expectancy without inviolable risk management is the number one reason the majority of traders fail.
He stole the idea from me:
http://www.elitetrader.com/vb/showthread.php?s=&postid=1120324&highlight=philharmonic#post1120324
It must have been a good idea, because moderation immediately closed the thread. One of my better threads, I thought, written before my shrink Dr. Mudgins found the right cocktail of meds.
So if you don't have a Philharmonic, buy one. It makes the most marvelous resonant singing tone when you flip it. Doesn't taste bad either. I eat sushi off of the heads side of it. The tails side tastes a bit salty to me, but that is only to be expected.
http://www.elitetrader.com/vb/showthread.php?s=&postid=1120324&highlight=philharmonic#post1120324
It must have been a good idea, because moderation immediately closed the thread. One of my better threads, I thought, written before my shrink Dr. Mudgins found the right cocktail of meds.
So if you don't have a Philharmonic, buy one. It makes the most marvelous resonant singing tone when you flip it. Doesn't taste bad either. I eat sushi off of the heads side of it. The tails side tastes a bit salty to me, but that is only to be expected.
Just wanted to give some input. I disagree with the idea that a high IQ has anything to do with success rates playing the markets. For the second question, I believe you have an edge when you are confident in your system. I think it's hard to be confident in these volatile markets if you have a system that isn't profittable!
Nce again an edge is something to exploit within market structure and I don't mean ta. Or it's inside or unique information. Everything g else is noise and most here are noise traders based on these posts. Gimmmeee a break!
Apologies to Dobbes, the thread starter, for what to him must seem a diversion, but this IS ET. You see here two camps forming. The expectationists, and the expectorationists, those of us for whom expectation might as well be spit. I do not care about expectation, as long as it is comfortably positive, because I can't define my lack of a system well enough to test it to find out what its expectation won't be in real trading. How do you systematize an hallucination, as NoDoji puts it? The nagual coexists with the tonal. The macro evolves from the quantum. It is in that instant when the nagual chooses to become tonal, and quantum commits itself to macro, that the trade becomes. Just as all else is binary, good/evil, man/woman, queer/straight, dance/can't, suck/won't, trades are binary, breakout/reverse. Consider the reversal, where the conspiratorial trickery of the nagual/quantum duality is clearest. You can code reversal detection elegantly and efficently in about 20 SLOCs, and capture every one, no matter how complex. "I'll be rich!", you cry, at your coding success! Until you test it. Most turns look more or less alike. What distinguishes trade from fakeout (for that is what it is), is that elusive quality "persistence." It is persistence, and persistence alone, that trading sorcerers perceive. They taste potential. They smell duration. They hear longevity. They see the longing of price to run unfettered. And they feel, but conquer, the primal fear of jumping on a fast-moving freight train. "Knowing" the direction of a breakout before it occurs is the highest order of sorcery.Ehorn claims to do it tens of minutes before the event. I can sometimes do it a few minutes before the event. But I don't believe either one of us.
all the posts that deal with:
"If you have a positive expectancy (ie, you make money) after forward testing with a lot of real trades, then you have an overall edge"
are correct. A lot of the other stuff s guessing and conjecture. It is the kind of thing that would make a gambler winning over 50% of the time, when in almost all situations, the odds favor the house. Few gamblers do. A gambler's edge might be cheating, card counting or something else,
Contrary to the adulation the post got listed how "X, Y and Z are not edges", he is guessing.
Things like low commissions, money management and many other things let you PRESERVE winnings better. But they will not get you over the 50% hump (50% is breakeven).
But few traders ever get a real outperformance edge that is both lucrative and lasts a while.
"If you have a positive expectancy (ie, you make money) after forward testing with a lot of real trades, then you have an overall edge"
are correct. A lot of the other stuff s guessing and conjecture. It is the kind of thing that would make a gambler winning over 50% of the time, when in almost all situations, the odds favor the house. Few gamblers do. A gambler's edge might be cheating, card counting or something else,
Contrary to the adulation the post got listed how "X, Y and Z are not edges", he is guessing.
Things like low commissions, money management and many other things let you PRESERVE winnings better. But they will not get you over the 50% hump (50% is breakeven).
But few traders ever get a real outperformance edge that is both lucrative and lasts a while.
TZ, you describe the world of the rational, logical, systematic trader. I am an irrational, illogical, unsystematic trader. Just because it is indefinable doesn't mean it isn't an edge. And what is wrong with guessing? Let's not pretend that systematic trading is not guessing, especially in the midst of a vexing drawdown which exceeds experience. Almost every trade I make is a winner. You can argue that such a high win probability passes on a multitude of higher risk trades with higher reward. But by no means is what I do guessing.