Do you need a real edge trading the Bond market?

Discussion in 'Financial Futures' started by Ronjohn, Mar 10, 2017.

  1. luisHK

    luisHK

    That's a thing, as mentioned by Lovethetrade above, retail/private investors don't need to avoid at all cost or be fired a drawdown of 20/30/40% and they can use riskier strategies , although it's most probably a road with far more tragedies than successes.
    Lower risks/less volatile strategies make a lot of sense, but if one has enough capital or a significant extra source of income.
     
    Last edited: Mar 12, 2017
    #21     Mar 12, 2017
  2. algofy

    algofy

    So maybe, I just need to change the word edge to alpha?? I actually like alpha better as I agree edge gets used to much.
     
    #22     Mar 12, 2017
  3. sle

    sle

    Yeah, alpha is more appropriate. Or a mix of alpha and beta, if you are more of an investment type.
     
    #23     Mar 12, 2017
  4. sle

    sle

    No, this retail trader has alpha, but no edge. I am not saying that a retail-sized trader can't have an edge. For example, if you have a way to collect information that's not available to other players, it's an edge.

    Knowledge and skill can be obtained by any market player and is an edge requires prohibitively high time or infrastructure investment.
     
    #24     Mar 12, 2017
  5. sle

    sle

    On the topic which I assume is corporate bonds for a retail sized guy. Fixed income is more diverse and more technical then equity. I think it's actually possible to extract alpha as a small trader, depending on your skill set, but be prepared to learn a lot of stuff.
     
    #25     Mar 12, 2017
  6. Well, it looks like the majority of online sources are wrong then. Better send an email and educate them as to what edge really means based on your own unreferenced, unsubstantiated definition.
     
    Last edited: Mar 12, 2017
    #26     Mar 12, 2017
  7. newwurldmn

    newwurldmn

    Sle's definition of "edge" is what institutional traders use. Only retail traders are so insecure that they have to call their indicators and models an "edge."
     
    #27     Mar 12, 2017
    Tim Smith and dealmaker like this.
  8. sle

    sle

    My definition is consistent with anyone who has worked in the financial industry, as opposed to sources peddling bullshit online to naive general public. Those very same online sources want you to believe that making money is as easy as signing up for a seminar at the cost of $399.95 :)

    That definition of "statsical advantage due to the setup" itself comes from gambling, where the house has an edge (http://vegasclick.com/gambling/houseedge). That edge is intrinsic, you put almost anyone in the dealer seat and they will make money.
     
    #28     Mar 12, 2017
    Tim Smith and dealmaker like this.
  9. Or maybe it's the other way around, "employees" of institutions are so insecure about not being able to build models or trade their own account they have to piggy back an institutions financial clout.
     
    Last edited: Mar 12, 2017
    #29     Mar 12, 2017
  10. But you can't find one single source to back it up. No worries, we'll all take your word for it.

    An edge at a casino is not the same as a trading edge.
     
    Last edited: Mar 12, 2017
    #30     Mar 12, 2017