What is an "edge"?

Discussion in 'Trading' started by schizo, Nov 6, 2019.

  1. Neuroway

    Neuroway

    @volpri, I agree. Discovering that you are able to bleed the sheep to death is not an edge. It's just about discovering who you really are.

    Here. Aesop. Back from 620 BCE. Caveman morality, should I say. Primitive at best. The worst of it has no name found yet. The jungle book describes it best.

    https://fablesofaesop.com/the-wolf-and-the-lamb.html
     
    #81     Jan 19, 2020
  2. volpri

    volpri

    I go with the river the wolf can do what he wants. The market is the river. The wolf is ______. The sheep is ______. Neither are pertinent to the river nor necessary. They may be at the rivers edge lapping the waters for a tad bit or they may not. The wolf is looking to eat the lamb the lamb is looking to escape the wolf. They both should jump in the river. The lamb will thus escape the wolf and the wolf will thus get a bath. All will be happy and the river continues to flow.
     
    #82     Jan 19, 2020
  3. Real Money

    Real Money

    There are huge edges. I love minute charts and intraday price action/momentum (futures).

    Structural edges are the best kind. I'll tell you the ones I like, take it or leave it.

    (1) Rate/Index Futures Spreads
    (2) Index Arbitrage Spreads
    (3) Index Spreads
    (4) Analyzing Synthetic Portfolios

    A rate/index spread tracks cash flow between treasuries and equities. Risk on / Risk off

    Tracking index arb and the trading in the equity index basis is the best edge I know of. ES traders get stopped out all day long because of this. Easy money if you trade against them.

    Index spreads tell you what is really going on in the market. Retail and small speculators can't move these spreads, but large spec and prop firms love trading them.

    Rate futures, Index Futures (ZF, ZN, ZB, UB ... NQ, ES, YM, RTY) are hedging instruments to cut risk and control the volatility of a portfolio.

    It follows that the performance of portfolios with typical allocations will determine the demand for these instruments. You can front run institutions putting hedges on / taking hedges off

    Start looking at synthetic portfolios with a range of allocations and compare them to the action in the markets. You will see through all the gaming / traps / liquidity hunts......

    Learn the basics. Spot and forward markets, market making in forward instruments, portfolio theory, and market structure.
     
    #83     Jan 19, 2020
  4. Neuroway

    Neuroway

    What they should do is in the eyes of the animal spirit possessing you, @volpri. Fake reality, should I say. What they will do is what will really happen. And it's not only in their eyes. It's in their blood. It's in their ears, in the unique perfumes they perceive as individual. To be honest, they couldn't care less about what you think they should do...
     
    #84     Jan 19, 2020
  5. volpri

    volpri

    Lol what is fake is the story. Lambs and wolves don’t talk. Rivers sing as they flow. I’m jumping in the river.

     
    Last edited: Jan 19, 2020
    #85     Jan 19, 2020
  6. Neuroway

    Neuroway

    A cute little singing bass. Small petty Yankee colonial stuff... Jolly good, clownesque and entertaining show indeed!!

    MY world is this. And it has nothing to do with mare eating chicks. Believe me, Yank.

     
    #86     Jan 19, 2020
  7. Neuroway

    Neuroway

    I wasn't born out of millionaire fathers, like you screwy, big mouthed, unworthy Yanks. I was born out of poor European blood that gave all they had in a series of wars that weren't worth it. I earned everything I have. Every single penny. I didn't inherit anything. Not a single penny. I'm worth every single penny I have. For me it was another journey. For you it was nothing.
     
    #87     Jan 19, 2020
  8. Neuroway

    Neuroway

    "Poppies, patriots and pro-brexit propagandists should visit war cemeteries."
    - J. C. Juncker
     
    #88     Jan 19, 2020
  9. lovethetrade

    lovethetrade Guest

    An edge is ANYTHING that contributes towards your ability to extract and generate alpha over the long run. There's no rule book in this game.
     
    Last edited by a moderator: Jan 19, 2020
    #89     Jan 19, 2020
    zdave83 likes this.
  10. deaddog

    deaddog

    Would you not consider that an edge?
     
    #90     Jan 19, 2020
    zdave83 likes this.