Having and edge over the market

Discussion in 'Trading' started by gifropan, Mar 9, 2007.

  1. In trading literature one often comes across the phrase "you need to have an edge over the market" Can someone elaborate on this statement. Does this mean that you have to have more winning trades than loosing trades? Or is the "edge" a deeper concept??

  2. Think probability, then be the casino
  3. man


    use the search function. this has been discussed 412 times.
    without an agreed upon solution btw ...
  4. It doesn't mean anything. Just because you find a strategy that makes you $, doesn't mean its a edge...because chances are that there's 1,000,001 people that trade the same way as you.

    In my opinion, an edge is nothing more than the right entry/exit...after all, timing is all that matters anyway.

  5. A very simple explanation is like cashmoneys. Its simply a combination of things that results in a positive expectancy of making money.

    It could be a pattern you recognize with an entry you've tested and either a target for the pattern or a trailing stop to exit with a profit or loss.
  6. This is another frequently asked question here at ET.


    Good past threads on the topic:



    Therefore, it is a more deeper concept than win:loss ratios.

    The most profitable trader I personally know (~700k/yearly) has only 48% winners.

    He has many different edges and only one of them deals with his pattern signal.