What is an EDGE in the strategy?

Discussion in 'Trading' started by rajesheck, Oct 21, 2016.

  1. Well, he did site links to the specific articles where he sourced his info.
     
    #31     Oct 24, 2016
  2. "Trading is an art"! or else every Dick and Harry would become Michael Angelo
     
    #32     Nov 7, 2016
    lawrence-lugar likes this.
  3. comagnum

    comagnum

    An edge gives you high probabilities of winning over a large enough data set. You can have numerous edges on one trade. Take today for example:

    1.) Edge #1 Historically last Friday was the largest # of consecutive down days in 36 years, unlikely to carry further.
    2.) The traders almanac has the day prior to the election having been up 81% of the time since 1952.
    3.) You had a large gap up with advancing volume 30 minutes into the open at 10-1, the chances of a trend day were very high, meaning a big up day closing at the highs
    4.) The puts were at highs not seen since Sept 2015 - the sentiment was overly bearish - once again unlikely to sustain.

    The edge comes from lining up as many high probability events as possible and pressing the winners with size while cutting the losers off - knowing when you to get out and wait for an edge to occur, and most importantly having a real good risk mgmt.

    This video shows how a pro gamble takes a small edge to take down a few Casino;s - same applies to trading.
     
    #33     Nov 8, 2016
    userque likes this.