The Meaning of A Trading Edge

Discussion in 'Trading' started by tradingjournals, Aug 10, 2010.

  1. The Meaning of A Trading Edge: Please describe what it means to you. I asking for it because it is my belief that a trader is part of the loop to which the edge is attached/related.

    Try to be crisp/succinct in your description, but you can think out loud if you desire/require.

    Write it in your own words. Do not be concerned about what others think or would say about your edge description. There is no single perception of an edge, because people and their perceptions/circumstances/etc are generally different.
  2. A trading edge is the identification of prolonged statistical anomaly in the market - a certain behavior that repeats itself for long enough to be exploited for a profit.

    Traders often make the mistake of thinking an edge is a certain skill the trader has. It is not.

    An edge is based on provable external data. The likelihood of something happening with greater than 51% probability.

  3. Arjun1


    No such thing as edge.

    Risk is the only reality in the markets.

    You job as a trader is to minimize/limit/avoid/contain risk from every angle.
  4. tradingjournals:

    You had started quite a few threads in recent weeks. This one: The Meaning Of A Trading Edge. Past ones: Your Most Valuable Trading Asset Is XXXXXXXX; The One Thing That Changed Everything In Your Trading; etc..

    Are you collecting materials to write a journal (as your handle suggested)? Can you tell us your intent?

    While your subjects appeared to be serious discussions, when someone else posted a question about the pre-market indicators... your answer:


    Should we treat you as a serious journalist? Or just a troll?
  5. I prefer to cut & paste other people's posts. It sounds so much more erudite taht way. :)
  6. I like that definition of an edge. I'd add that one's skills enhance the result.

    I found a "trading edge" during the GFC of '08 and '09 which produced outsized returns for 20 months. But with all of the bail outs, stimulus and printed money, it ended. I guess my 15 minutes of fame is over :)

    Now if Greece would only slide financially into the Aegean... :D
  7. One cannot be serious all the time, and it was an answer similar to an answer I received in one of the threads I started about traing assets. The answer was not meant to offend anyone, but rather to make people read unusual answers. I have no objection that it gets removed. I hope that my other answers were different. As for the threads, I believe that asking core questions can be of help in pushing readers to extract and share the main juice of their thinking.

    I have also received insults or veiled insults in threads I started which I usually skip/ignore. My aim is never to insult anybody because it is not good a thing.
  8. You mean place/state/condition that leads to dollars being dropped on the street, but which cannot be seen by everyone?

    What is long enough, and how to make sure it is still long enough?
  9. FXWave


    [4) An edge is just the greater probability of one thing happening over an other

    Trading in the zone- Mark Douglas

    Once again the 5 Fundamental truths are:
    1) Anything can happen
    2) You can make Money without knowing what is going to happen next
    3) There is a random distribution of wins and losses that define an edge
    [4) An edge is just the greater probability of one thing happening over an other
    5) Every moment in the market is unique

    That book could be quoted all day for trading wisdom but....

    Quote by Ram Gopal Verma on his blog:-

    "Books make you understand experiences and experiences make you understand books."
  10. Thought to add that I am trying to contribute like others. I have being exchanging with a 73 year old person who seems to be very interested in reading what others thing. You may catch the discussion at this link:

    As for whether I am serious or a troll, either way you judge is fine with me. By the way, I do not know what a troll is, but I am guessing that it is not something good. You have the right to your opinion.
    #10     Aug 10, 2010