What is Not an edge?

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

  1. In a general sense selling options has no inherent edge... Options are in theory priced such that over time you can not win or lose either buying or selling them.. If you have a general bias to the idea that selling them has edge you inherently will go find facts to support that idea.. Plenty of substance out there to take that view.. But this is not an edge
     
    #41     Nov 15, 2013
  2. What did I tell you, the option sellers will come and deny what I just said 3 posts above :D
     
    #42     Nov 15, 2013
  3. As far as trading is concerned, you have an edge if you simply know how to consistently profit from non-random price movements. This can only be accomplished through intensive backtesting.

    The other type of edge comes from illegal insider information (hello Gordon Gekko) and/or superior trading equipment (ultra fast access to information and data feed, for arbitrage purpose for instance).
     
    #43     Nov 15, 2013
  4. i'm not an option seller.. anymore then i'm a buyer...
     
    #44     Nov 15, 2013
  5. fxwannaB

    fxwannaB

    An edge is something new, an innovation, something that hasn't yet been exploited...

    anything that is known, that has a name is not an edge.
     
    #45     Nov 15, 2013
  6. Edge is the kernel/ center/ heart of a trader's most important/ critical substance.

    Without a valid edge, or when an edge is outdated, the trader cannot attain his previous top performance anymore, even all the auxiliary components (such as position sizing formula) surrounding the kernel are still working well as expected.

    Then the trader has to work hard on improving the old edge, possibly again and again.

    We may apply the same auxiliary components (such as extremely low commission rates, extra fast connections) to a newly improved edge kernel.

    All these auxiliary components are Not edges.
     
    #46     Nov 16, 2013
  7. +1
     
    #47     Nov 16, 2013
  8. jnbadger

    jnbadger

    Lack of experience. Not an edge. Usually.
     
    #48     Nov 16, 2013
  9. +1

    Having a lot of experience however without adequate analytical and innovative skills --- Not an edge. Most likely.
     
    #49     Nov 16, 2013
  10. dbphoenix

    dbphoenix

    Actually very likely. I know people who've been at this for nine years and more and can barely cover expenses. Experience in and of itself is not an edge.
     
    #50     Nov 16, 2013