I fully agree. However, I also believe having edges does provide additional competitive advantages - meaning a potential for better ratio of "return vs loss".
To a profitable trader, an edge is very personal, like a girl he loves. In trying to express what an edge means to him, this simply would take up too much of his time in order to bother with it. Edges in the sense used in this thread are mainly loser's dream phantasies about magic wands to become rich.
The only reason that I can think of to quantify your edge, would be to exploit it when it is unusally strong. However, that may require near continuous calculations...or at least often enough to not be feasible. You would need a "base" number which is probably a mathimatical nightmare in itself.
My belief and experience have been measuring edge should be aimed for facilitating adaptation to changes of market characters.
I guess the importance would be having at least a little bit of luck periodically, besides some tools such as backtesting.
E.G. That is to say: Prediction is not necessary if targeting small profits, however it would be very important if targeting good profits.
Other reasons to quantify your edge it to be able to know when it no longer exists and to size your position according to the strength or weakness of the edge. A useful metric can be calculated very easily. A simple description on how to identify when to stop trading if the edge stops working was posted by acrary. The entire thread was very interesting but the Acrary post on 11-19-02 10:03 PM was best. http://www.elitetrader.com/vb/showthread.php?s=&threadid=11054 Too bad acrary is away doing other things.... Is edge the same as the inverse of risk? Edge is gone when the risk becomes too high for the trader to succeed. Someone with an edge is trading at low risk, right? Good luck
"Edge" is just a synonym for positive expectation aka a winning trading strategy. Want an edge? Get the following: A strategy with a backtest of at least 30 trades after subtracting the number of optimized parameters; A net profit at the end of the backtest; A greater profit than you'd have gotten from simply buying and holding. If you are missing any of those three components, you do not have an edge in trading. All other definitions of "edge" wrt trading are crap.