A so-called edge is knowing that you will make the correct choices more often than not... thus obtaining a high batting average. It is mastering your craft such that you put yourself in a position to win each day... each year. How do you obtain this edge... among other ways... via hard work, smart work, preparation, balance... ....and most importantly learning to trust yourself. This latter comes about for less naturally 'gifted' persons.... by personal growth, self-awareness and develoment of a balanced emotional state of mind... leading to formation of positive trading habits. An introspective mind and a quest for self-knowledge gives one an edge as well..... provided.... one does not over-analyze. I am speaking here about a successful discretionary trader! Ice
i didn't find them at all obvious. i don't use charts, realtime or otherwise, i don't watch CNBC, i have access to all the live newswires, but i ignore those too, any shmo with $2k can get $0.005 commissions, if i was only trading MSFT, non-MSFT news would be nothing but a distraction... did i miss any? but i'm going to shut up now, because the last thing i want to do is give away my own edge by having people reconsider what they think is their edge!
I apologize, I was under the impression you were claiming that an 'edge' was an impossibility. I was starting with what I thought would be the most clear examples of one trader having an advantage over another. This is why I used very tangible comparisons like available capital, available information, rate of information delivery, etc. I misinterpreted you. Take care, RLB
the presenter on behalf of the king did a nice job. The major major clue that leads to an empirical toolbox, in my opinion, could not have been more fundamental or basic. Obviously, putting a trading person in a setting that includes the two fundamental items that required comparison for the guys to draw their conclusions, is the requirement for winning.
Thanks for bringing up this idea. I wasn't familiar with the two economists or their theory, but am familiar with the idea, which Van Tharp discusses in "Trade Your Way to Financial Freedom" and Mark Douglas discusses in his "Trading in the Zone", albeit from quite another angle. My initial kneejerk response was also "nonsense", but after consideration, it was "hardwired" and "probably can't get rid of the problem" that I disagree with. Hardwired is a 0-1 condition and there is enough data to show people win in the market, even if for short periods of time. My own experience with Vipassana meditation, as well as its "theory" and the many "unscientific" experiences of its many practicioners also says that one can indeed observe, and change, our seemingly "hardwired" reactions. That Kahneman was able to quantify the concept is a step in the right direction. The next step, however, is far more important: What to do with this insight. To that end, there is interesting work bieng done of late in financial psychology, particularly methods based on work by Gene Gindlen, whose primary proponent is Flavia Cymbalista of <a href="http://www.marketfocusing.com" target="blank">market focusing.com</a>. <a href="http://www.robindayne.com" target="blank">Robin Dayne</a> is also doing work with body memory and patterns to make market reactions more in line with expectations. I found extraordinary correspondences in their work with Vipassana, but that incidental to their thesis: practical methods to get in touch with intuition in a climate of uncertainty. Ana Maria
The point you chose to not address was the fundamental opportunity that all this represents to traders. See my other post.
Vegasoul has a point,except the theory is flawed because it's to general and vague.Most of us traders can avoid pit falls like the theory if you adhere to your personal trading strategies. However, the general public does fit the criteria of the theory.You only have to look back to 98 and 99 when investors put the most capital in at the bull markets peak.Then only to sell at or near the perceived bottom.People whose only exposure to the markets, is their monthly contribution to their 401k, are infinately more prone to falling into this trap.