What is an edge?

Discussion in 'Trading' started by padutrader, May 10, 2018.

  1. padutrader

    padutrader

    i have been hearing this word from all the experts ,what the hell does it mean?
     
  2. pushpop

    pushpop

    An edge is a line segment that joins two vertices.

    More on point to your question, in context, an edge is an advantage over the markets or other traders. It is what makes you a profitable trader. The difficult part is finding an edge, creating a plan and trading the plan (read your edge).

    An edge could be anything, from a trading methodology to an algorithm.
     
  3. userque

    userque

  4. Robert Morse

    Robert Morse Sponsor

    An edge comes from a process you have, to place a bet on an occurrence where you have a higher probability of success than loss. For Blackjack, it is card counting. For trading, it can be anything that works consistently. Most "retail" day traders find this with some type of charting technique. Most banks and institutional find unique data sets to exploit.

    Bob
     
    Last edited: May 11, 2018
  5. bookish

    bookish

    Edge=advantage
    similar: having a "card up your sleeve" or "Bob's your uncle"
    In the latter case we are not referring to Mr. Morse, though having him as your uncle would probably be a bonus.
     
  6. An edge is a high probability competitive advantage derived from backtesting and forward testing.
     
  7. To know that the price action is non linear:D
     
    • Edge is a favorite buzzword among some of the posters on ET.
    • It is meaningless.
     
  8. to simplify: some reason why you think you could, via your trading and what not, beat just sticking your money in SPY, QQQ, etc.
     
  9. An edge is a combination of different things that come together to achieve a common goal.. That's why success is hard at first in this world, because you have to master emotions, execution, risk and a lot more. An edge is "Mastery".. It is not a thing, it's a PROCESS.
     
    #10     May 11, 2018
    comagnum likes this.