What is your edge ?

Right having an edge is simply having a plan and sticking to it... if the stars tell you when the next bull market begins then buy buy buy!!!

 

No it isnt.

A plan is a plan, an edge is an edge.

 

What has the "EDGE"?
My plan has a quantifiable edge.
My strategy has a quantifiable edge only when used in the context of my plan.

 

Give two people the same game plan and profitable method with ambiguity and discretion.Each one will have different results ,the difference is the mindset.The past experience ,traits and beliefs affect how you trade.

Does having the right mindset give you an edge as a manual trader?

http://mindsetonline.com/whatisit/about/index.html

 

They are all of one piece of cloth. What you say makes sense.

 

"Edge" is the ability to spot patters with a high probability of producing winners. Traders like LBR called them "high probability setups". If you do not know how to find such setups you better stay away. No mental conditioning will help you. The market does not care about your mental condition. All those sexy psychologists saying those things are simply deceiving people.

You can find high probability setups manually or mechanically. Manual identification works only for very experienced tape readers trading a single market. All others should use mechanical identification followed by statistical analysis. A high Sharpe ratio is a must. It is a strong indication of significance but not sufficient.

Some tools you can use for manual identification of high probability setups:

TC2000 - for US stocks only - very good product
NinjaTrader/MetaTrader: you have to write code for the setups
Tradestion Radar Screen: must commit to brokerage service
Amibroker: has a good exploration feature but takes time to learn

Mechanical tools:

Price Action Lab- I think it is the best for identification of repeatable price pattens (micro patterns) in search or scan mode
Autochartist - good TA scanner but keep in mind that some patterns have high falure rates
Patternz - free program from T. BUlkowski - again some patterns have high failure rates

There are several others for both modes. This is the edge. Everything else is talk.

 

Excellent post!!

 

Close, but not quite. One must employ the correct method to the strategy that they use and stick to it.
http://www.elitetrader.com/vb/showthread.php?threadid=245590

 

How do you quantity an “EDGE” like that. Is it a case of either you have it or you don’t?

How about the individual that can spot the high probability set-ups but has difficulty trading them because emotional issues like fear and greed get in the way.

Without an overall strategy that includes risk and money management, set-ups are hugely over-rated.

Even LBR concurs with the importance of a trading plan.

 

I don't believe in mechanical/quantifiable edges available to the retain traders, not in the liquid markets at least. World's top minds and supercomputers seek and exploit those, so it's stupid to compete with them in their favourite game.

But one can have an edge by watching their (institutional) actions long enough on the chart (good news is they can't hide their actions from being reflected in the price history), learn their behaviour patterns and jump in and out when those repeating patterns appear.

That's the edge which can't be stolen or eroded, it evolves over time as trader watches his favourite market more and more and only gets better.