Disliked1. How does a trader (objectively) measure his edge?
2. Given that any trader can have a fortuitous run for several weeks, and possibly even several months, how many trades does a trader need to have behind him before he can be sure that his method (and implementation) will work profitably, no matter what conditions (price behavior) the market throws at him? Given the near random nature of price movement, can he really ever be sure?
I hope my questions aren't too off-topic. I don't want to hijack your thread. Perhaps you were going to discuss similar issues in your upcoming articles?
Ignored
A trader measures his edge simply by staying in the game. This is assuming at this point that the trader is or at least thinks of himself as a profitable career trader. At that stage he should already have a well developed system, suited to his risk tolerance that he is able to trade. He has already gone through the emotional roller coaster of becoming a successful trader. The best thing he can do after all that is stay in the game. Joining an active forum like this can help him have the pulse of the market and general trend of other traders. It can alert him to timeframes coming where his system might not achieve consistent results.
This ties into question 2, the answer to it being he can't. A successful trader is able to recognize flaws in his system as the market changes and adapt to overcome them. Now I am not talking changing strategies every week. I am saying that a successful trader analyzes losses and wins throughout market periods to determine what needs to change in order to confirm entries in the current market. A rule tweak here or there, can make all the difference depending on the current market. There are markets where you are going to be more
The journey to getting to the point where you start what I have described is the hard one. Once you have the experience to quickly recognize and adapt to current market conditions while still trading around a system you fully understand and are comfortable with. You’re golden.
The basis of a democratic state is liberty. ~ Aristotle