Tradess0610 I'm afraid you'll find that once a trader FINALLY stumbles upon a system/strategy that is actually profitable they tend to get more and more tight-lipped. That's only human nature. Thats why I'm suspicious of all those so-called gurus on youtube. If they are actually profitable I doubt they would be blabbing their strategy for free all over the Internet.
Obviously at some point the exponential gains become more difficult due to potential sizing issues and other factors. But leaving that aside to me like 20% gains a month is getting into the territory of great results. You said extreme example I get that. But 13-18% a year unless we're talking about a massively size portfolio there's not likely a hard edge there. Even than It's probably just general position sizing to account size along with a time edge. Buying a major relative low or selling a major relative high with good R/R is extremely efficient and generally a smart thing to do, not saying it isn't. But that's a far cry from actually having a hard edge. Discipline and risk management is the starting point for anything related to trading that is your foundation of an edge, no disagreement there. After that a hard edge after that just puts you in a position for exponential or out sized returns.
Most of the day trading gurus, what strategies they employ are not scalable as a lot of them trade penny stocks where the floats are quite low. So, they do the next best thing which is sell their trading methods to day traders. They earn more from their seminars, dvds, trading rooms than they would earn from day trading. Of course, they never tell their students that.
I am not authority on this, nor claim to be. Just simply sharing my experience through trading with a lot of different people either on voice / screen share or in person. It's not a definition to give necessarily, it's a question that basically answers itself. If your account isn't growing at a fast rate, than it's unlikely you have a hard edge, because if you did why would you be making gains comparable to just a time and foundational r/r edge? Let's take 18% a year as an example since that's a number you mentioned on a $50,000.00 account. That's averaging like $36.00 a day.... what kind of hard edge can someone truly have if you're only generating $36.00 a day on a 50k account?
That's no excuse for not making an insane amount of money in their personal trading account from trading alone. By the time they scale up to the point of liquidity issues they should be a millionaire,perhaps many times over.Assuming their strategy works as awesome as they claim it does.
IDK, that's why I asked you how an edge can be determined. How about this... would you rather lose $36/day? Lol
Nobody knows for sure that they made their millions from trading. I seriously, doubt it. That is reality. They could have made tens of thousands before, the low float of those stocks stopped them. I have not seen anyone show their tax returns showing they earned their monies trading from all these so called gurus. That speaks volumes there.
What instruments do you trade? HG What strategy do you employ? Very Simple Price Action How did you reach consistency? via stats and what is essentially the Morse 4 What do you believe is your edge over algorithmic trading? Never considered the question. Tradess0610 - Question for you if I may: Would you say you are/want to be more of an artistic intuitive trader or a rules based trader?
I can just list some that I would consider a hard edge in no particularly order: #1 Being able to determine when a short or long has less probability to work and/or less probability to produce a sizable move even if the signal does work in your direction. In other words not just using your information and indicators to find a trade, but using them to rule out low probability trades as well. Every loss you can avoid, has the potential to greatly increase your profitability / profit factor, whatever terminology one wants to use. #2 Being able to understand where and how buyers and sellers are being trapped. #3 Having actual hard math mathematical probability as to if the low or high of day has been put in during a session. #4 Understanding when and how to use means reversion / imbalances getting filled. Also understanding what % of the time intra-day do the imbalances get filled before the market closes. #5 Understanding when overbought scenario is actually bearish and when it's actually super bullish and you should be taking long positions. #6 Just pure screen time and ability to understand how stable the market is, during a particular session. Just rattling off some things here. All these could be edges that if added to a basis of discipline and strong risk management, could turn decent gains into outsized gains. Hopefully this is an acceptable or reasonable answer.