What is Not an edge?

O

OddTrader

We may not know definitely what is exactly an edge. But I think we should know easily what is Not an edge.

After we clarify the possibilities of "what is Not an edge" individually, perhaps we would know better what is an edge by then.

1st: Is position sizing an edge?

" So why isn't good money management considered to be an edge? " http://www.elitetrader.com/vb/showthread.php?s=&postid=3900937#post3900937

Note: This is the 222nd thread discussing about "Edge" on ET.
 
Fight price movement.., all the MM in the world won't save your ass... or make one profitable

MM can only enhance that which is working.., or possibly turn marginal into profitable - at best

RN
 
I'll pick the easiest answer. Slippage and commissions.

What do I win?

BTW, I'm only being slightly sarcastic since I think most new traders don't take these seriously enough.
 
Quote from OddTrader:

We may not know definitely what is exactly an edge. But I think we should know easily what is Not an edge.

After we clarify the possibilities of "what is Not an edge" individually, perhaps we would know better what is an edge by then.

1st: Is position sizing an edge?

" So why isn't good money management considered to be an edge? " http://www.elitetrader.com/vb/showthread.php?s=&postid=3900937#post3900937

Note: This is the 222nd thread discussing about "Edge" on ET.
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In my opinion, position sizing is not an edge all by itself. Just the same, money management is not an edge all by itself. Just the same, discipline (having the ability to execute the designed trading plan) is not an edge all by itself. Trading experience is not an edge all by itself. Cheap commission rates is not an edge all by itself.

What I mean is that if you do one thing and nothing else...it won't make you a consistently profitable trader.

Therefore, an edge involves many things working together as a team.

Also, anything that a trader is NOT able to prove to themselves that their trading improves when they use it...its NOT an edge...regardless if that same thing does help someone else.
 
Quote from wrbtrader:

In my opinion, position sizing is not an edge all by itself. Just the same, money management is not an edge all by itself. Just the same, discipline (having the ability to execute the designed trading plan) is not an edge all by itself. Trading experience is not an edge all by itself. Cheap commission rates is not an edge all by itself.

What I mean is that if you do one thing and nothing else...it won't make you a consistently profitable trader.

Therefore, an edge involves many things working together as a team.

Also, anything that a trader is NOT able to prove to themselves that their trading improves when they use it...its NOT an edge...regardless if that same thing does help someone else.
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A collection of elements, each of which in and of itself does not constitute an edge, do not become an edge simply because they are combined.
 
Quote from dbphoenix:

A collection of elements, each of which in and of itself does not constitute an edge, do not become an edge simply because they are combined.
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That's not what I said.

I said they must work together as a team. Simply, if they are combined and don't work well together...it's not a team in the way one needs to win consistently.

Kind'uv like the USC football team some years back that had 3 players go to the NFL in the first round and 4 more go in the 2nd round. Today, most of them are starters in the NFL but that USC had a losing record.

They weren't coach well and they didn't play well together as a team. Just a bunch of guys trying to do their own thing instead of working together as a team to get a winning record.

Regardless, I'm confident if you get a trader with good discipline, good money management, good capitalization, good trade signal and good other things...

You'll have a profitable trader. Yet, start taking away some of those components, the trader should begin to struggle or worst.
 
Quote from wrbtrader:

That's not what I said.

I said they must work together as a team. Simply, if they are combined and don't work well together...it's not a team in the way one needs to win consistently.

Kind'uv like the USC football team some years back that had 5 players go to the NFL in the first round and 4 more go in the 2nd round. Today, most of them are starters in the NFL but that USC had a losing record.

They weren't coach well and they didn't play well together as a team. Just a bunch of guys trying to do their own thing instead of working together as a team to get a winning record.

Regardless, I'm confident if you get a trader with good discipline, good money management, good capitalization, good trade signal and good other things...

You'll have a profitable trader. Yet, start taking away some of those components, the trader should begin to struggle or worst.
More...

Okay. A collection of elements, each of which in and of itself does not constitute an edge, do not become an edge simply because they are combined into a team.
 
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