This is why i said superior, above average, exeptional skill is your edge. Average skill = zero edge. This is a discussion about what works for a trader. Can great skill yield great profits, disregarding a true "edge" by your definition? I believe YES.
well you are still mixing the two, yes a skilled trader can make money, of course, so can an unskilled trader. At issue still is "the edge" which mav has yet to reveal.
I'm not mixing the two. You agree with me. Mav has stated that a skilled trader with no edge cannot make more than a school teacher. Read the quotes. In fact Mav states that without bullets and tape reading there are no more edges in equities trading. I don't believe those are the only edges out there.
An edge is something that someone has that gives them an advantage over another party. This advantage cannot be learned or it's value would be diluted. An edge is usually very expensive to acquire. There are large barriers to entry. For example, option market makers use to have a huge edge. But they PAID for it through their seat memberships. LTCM had an edge. They provided liquidity for the world debt markets. So they earned a spread for providing liquidity. They got to borrow money at virtually no cost as well. Citadel has an edge via their ability to own order flow and execute trades with zero slippage, and in many cases at a discount or premium to the marketplace. Floor traders at the CME and CBOT use to have an edge by trading in front of order flow. They PAID for this through their memberships. Some hedge funds in the past were able to get news before other people could and trade off of it. They were able to get order flow info by calling around. That was an edge. Some futures traders are able to execute their orders faster then other traders by getting priority in the que ahead of other people. They paid for this through technology cost. Arbitrage is a legitimate edge usually vis-a-vis providing liquidity. Other edges existed in tax laws, information flows, PIPES, convertible bonds arbs, etc. These are all legitimate edges. They all came out at a cost. Very few people could execute these edges. They were not learned, they were created or acquired. Being able to buy XYZ when it breaks through a moving average is not an edge. Selling something after a gravestone doji is formed is not an edge. Buying a market that is oversold on some oscillator is not an edge. Market profile is not an edge. Neither are using support or resistance levels. Neither is fundamental analysis.
Completely agree with everything you said. And those things you listed at the end, you are right, those are not edges, those are skills. MY point is, of the things you listed at the end, when a trader is more familiar with those and can use them BETTER than an average trader, in conjunction with a bunch of other skills that they are superior with(like controling emotion, cutting losses), THEN it becomes an edge. The key is, when everyone is looking at the same chart, you see something they don't, or you come to a different conclusion than them.(in regards to chart reading) Unless you think that everyone trading charts or candlesticks or fundamentals or ANYTHING have the same skill level, then there can be an edge.
You go Purple Barney !!!!!!!!!! If you think you have an edge somewhere do not let anyone else crush your dreams. Maybe not the next Tiger Woods but next Phil Mickelson who knows. Thats why you need to give it a try.
this was likely the first sensible post of the whole thread. Your edge may be as simple as dedication to the trading game. Interesting to see that majority of traders here think that without an edge (as defined by Mav) you can't make good living (say 7+ figures). In a way that's a good news for those who think/know it can be done. Of course you need a very good set of skills/education but that can be acquired if you are smart and want to. It takes time because skills come alive only through experience. Ultimately, there is no reason why you should restrict yourself to stocks only! You should think about this again. good luck
Daytrade!!!! it's one of the highest paying jobs. Anybody that advises against it is a crappy trader. Becoming a good trader takes experience. I recommend using a simulator for a while for the practice. Treat it like you are trading your own money. Trade bullish/bearish power trends, clear cut trends that don't really follow the market. There a lot of them EVERYDAY. just flip through a large stock list or pay a programmer to build you a program that scans for them. Its great these days now you can start up with a little as 5k. Best of luck to you!!!!! Regards, Chris
Hey Mav, Little bit off-topic, but why do you think tape reading is dead? Just pick up a listed stock with the trade volume WAY bigger than on other exchanges/ESNs, and you'll see the same patterns you used to see: stepped up bids, plus tick bids, perfect prints, refresh offers (if the specialist/floor broker did put reserve size). The tape doesn't lie does it? Another problem is that you cannot see those patterns by a naked eye because the market data feed disseminated from NYSE is way different from what you used to see before Hybrid. That's where programming skills become very handily I do see those patterns today, and the game is not over, it's the rules that have been changed... I think (and I agree with what you said many many month ago that the game didn't changed in a 100 years ) the tape reading skills still valuable these days, but you have to use yet another autobot in order to capitalize form it.