Ok Ok what edge

Discussion in 'Professional Trading' started by jrlvnv, Jul 12, 2005.

  1. jrlvnv


    I keep hearing this. In order to make money you have to have a edge. Well sounds logical but never heard anyone talking on what there edge is. So does anyone care to explain or give detail on how they feel they have a edge or what there edge is? Thanks to all that respond

  2. ozzy


    ozzy's edge:

    I know that I do not know.


    P.S I think the term "edge" is overused and over glorified in the trading world. I prefer to use the term "i gots mad skillz yo". sucka.
  3. Dr. Alexander Elder said it best: "If you don't know what your edge is, you don't have one."
  4. An example of an edge (ie what one trades to get money).

    For long trade.

    6ema must be above 12ema.
    flag sloping down must form.
    after 4 bars form trendline across top of bars
    enter on break of trendline.

    stop 2 pts below the bottom of the flag.

    trail stop 1 pt below 2nd bar when price exceeds the original high.

    That might be a positive edge.
  5. Vince1


    To me, having an edge is being creative somewhere. It can be looking for intraday patterns on a 45-minute timeframe (I don't), or finding micro rarely-occurring patterns on market profile charts (hum), anything. Reading as many trading books as you can and watching the market with some regularity, and you almost have to come up with something++
  6. syrre


    To me, if you are consistent profitable in a given market, then i would say you got an "edge" in that market.
    If you are good at it, does NOT matter how you do it, as long as you are sucsessfull, and its not just a bunch of luck. You beat the market most often.
  7. Hi jrlvnv,

    You've only been a member since May 2005...assuming you haven't had any prior alias.

    With that said, traders at ET talk a lot about their edges and some have gone into in-depth detailed about such.

    Edges can be involved in anything...

    * Entry signal
    * Commission rates
    * Trading Platform
    * Data Vendor performance
    * News services
    * Networking with other traders during market hours (public chat rooms, private chat rooms, private group meetings)
    * Trade Management (after entry)
    * Trading Environment
    * Psychological (discipline, ability to handle stressful trading conditions et cetera.
    * Anything else I failed to mention

    I myself have several edges (will mentioned two):

    1. My trading environment here at home.

    Very little distractions, spouse respects my trading hours, good health habits et cetera.

    2. My trade management after entry.

    I don't use fixed profit targets.

    I don't use fixed initial stops.

    I use wide range bodies (WRB's) and candlestick long shadows to identify shifts in supply/demand...

    Along with identifying s/r zones based upon WRB's, candlestick long shadows and sometimes volume spikes.

    Once again, edges can be anything and it most likely is either improving your profits or minimizing (reducing) your losses or both.

    Therefore, it's most likely the obvious (something we have prior underestimated its importance) and not some trade secret nor some quest for a holy grail trade signal.

    It's just a clearer understanding or more efficient use of something...

    Nothing voodoo.

    Thus, all the above types of edges I mentioned...non of them involve luck as some consistent losing traders may think.

  8. this makes sense. after a while, you can look at what you're doing, and begin see what you're edge is. sometimes your edge is market-dependent, and can change. knowing that can be an edge. knowing you have no edge can be an edge. even if you make entries at random, tight risk control and lots of cap can be your edge.

    it's like the whole suntzu thing.
  9. How about having good "taste" for the markets -- ie, trading as artform? I think a trader can get away with this pov, at least equally as far as those who consider the markets solely along mathematical lines. I've long felt the part(s) of the brain responsible for good timing in a trade (what an edge boils down to) is the same involved in arranging elements against a blank canvas or editing film scenes together -- spatial/temporal composition. How does one develop skills in any artform? Information, experience, ability to think "outside the box", taking risks, alot of correlations imo.
  10. there is definitely "art," or "analog," involved. that's my edge over rocket scientists -- they think it's all calculus. which it is, until it isn't. then we get things like Long Term Cap.
    #10     Jul 12, 2005