What is Not an edge?

Discussion in 'Trading' started by OddTrader, Nov 15, 2013.

  1. wrbtrader

    wrbtrader

    Bingo.
     
    #11     Nov 15, 2013
  2. Does edge exist? One should first prove the existence of something before searching for it.
     
    #12     Nov 15, 2013
  3. That logic assumes that the edge exists, and that the set of "what is not an edge" is finite and known, and that "what is an edge" is a knowable nonempty set.
     
    #13     Nov 15, 2013
  4. Let's give an analogy. Imagine a class trying to define a parabola and a dramabola (dramabola does not exist). So the class says, to find a parabola and a dramabola, let us look at what is not a dramabola and what is not a parabola. So they go over the list: triangles, circles and etc. Then they try the combinations. What do you think will happen at the end?

    Bottom line is this: one needs to prove the existence of an edge, and, if it exists, work to find sufficient (not necessary) conditions of an edge.
     
    #14     Nov 15, 2013
  5. pauk

    pauk

    Based on all of the live trading calls from traders on both this site and trade2win, over a span of about 5 years, I'd say practically nobody has an edge. There's about 3 traders on this site who make money, all who mainly only post in the pnl threads. I don't think they look at charts at all, since there is no 'edge' there. If there was, we'd all be making money.
     
    #15     Nov 15, 2013
  6. I want to add that Oddtrader started an excellent thread! Thank you.
     
    #16     Nov 15, 2013
  7. eurusdzn

    eurusdzn

    What about market selection as a skill, experience,advantage, edge.
    Two traders trading the same signals and mm rules are allowed to make their own selections of stocks and assets to trade.
    One trader does well, the other fails. This happens time afte time, year after year.
    The only difference is market selecion as the system is automated/mechanical. Hypothetical of course but...
    Is market selection an edge?
     
    #17     Nov 15, 2013
  8. dbphoenix

    dbphoenix

    Actually the thread is not about what is an edge. That's the other thread. This is about what isn't an edge. The existence or non-existence of edges would be a third thread, making 224.
     
    #18     Nov 15, 2013
  9. dbphoenix

    dbphoenix

    Nope.
     
    #19     Nov 15, 2013
  10. I am starting to think that a valid edge must have significant and outperforming profit expectancy (positive expectancy, of course).

    Small positive expectancy (with alpha return close to 0) should not be classified as having an edge, that means claiming simply "positive expectancy is edge" could be basically wrong.
     
    #20     Nov 15, 2013