Quote from Samson77:
Maverick
I respect your opinions and I know you have contributed to ET extensively and I have learned from your experiences personally but I have to agree with this guy about positive expectancy trades and edges in the market place, they are exploited all the time by traders, surely your not suggesting that edges do not exist?
Nope, not saying that at all. But we need to define what an edge is first. There are three types of edges for the most part. One is a commission/technology edge. These are guys that can trade at lower costs then other guys. They also have the technology to trade faster and more efficiently. This can be regarded as an edge since everyone is not on a level playing field.
The 2nd edge is order flow. This is mostly for guys on the floor but can also involve guys at trading desks at big banks that get order flow info. Order flow info can be a huge edge. And again, since we all don't have access to it, those that do are trading at an advantage.
The 3rd edge is guys on the floor or OTC dealers that earn a spread for making a market. Sometimes they are able to complete a risk free arb with the order flow they get, other times they are simply earning the bid/ask on the trade. These edges are real and they are legitimate. They are true edges because not everyone has the ability to trade with them.
Now on this board, you hear people talking about edge this and edge that. Hell, I even hear people saying that their discipline is an edge. Perhaps to them it is. But in my opinion, the only real edges that exist are the ones I listed.
Now does that mean that one can't trade profitably without these edges? Of course not. No more then it means that those with these edges can't lose. In fact most of them do, even with the edges. Why? They are bad traders. A bad trader will offset and positive edge he has to begin with.
Great traders can make money without an edge. The same way a great athlete can be successful in a sport even if he is smaller or shorter or slower then the other guys. But the idea that people have an edge, outside of the three things I have mentioned is erroneous. But an edge is not required to make a living trading. All the successful traders I know are successful because they are built differently then most people. They have a complete emotional detachment to money. They are incredibly discplined. And they work very hard. And when they come to the fork in the road and they have to make a decision, they usually make a very logical and intelligent decision based on the risk/reward and follow that up with stone cold discipline.
I wish there were a secret. A secret software program, a secret method, strategy. But there isn't. This will piss off a lot of people. Many people in here already know this. It really doesn't matter. The only thing that matters at the end of the day is your p&l statement. You can call it whatever you want. If you want to tell people you have an edge, more power to you. Sometimes men tell that to their wives so they won't leave them after they have gone though all their savings trading. Other guys tell that to themselves to help them sleep at night or to keep themselves from slitting their wrist. In the end, we tell ourselves what we have to, in order to move on. If it helps to believe you have an edge, then so be it.
