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How certain can you be that you have an edge?

  • #41
  • Jun 25, 2009 7:25am Jun 25, 2009 7:25am
Quoting LasVahGoose
Well, we just disagree....
Everything you have said can be concluded in one sentence:
"You can trade profitably by depending on stats alone"
which I have already refuted. More so, your paradigm cannot explain consistency.

The market is not irrational all the time. The point is being able to exploit it when it is rational (the usual case). Fractionalize the market into subsets, you can see that, for example:

Set 1 (Rational) + Set 2 (Irrational) = Market as a whole (Irrational)

An analogy would be: Random number + Known number = Random number

Another point is the relativity of point of view. In one point of view, the market may be irrational, but in another, the same market may be rational. Or one irrational market can cause rationality in another market (looks a bit like reflexivity). The method or key (or maybe someone would like to call it edge) is the technique of setting these point of views, which can be in terms of entry price, entry time or both.

Anyway, this is just some sharing to everyone here. Anyone can choose to believe whatever they are comfortable with.

Happy trading
  • #42
  • Mar 30, 2010 1:21am Mar 30, 2010 1:21am
Great! 2/3 people here believe they have an edge to win this game.
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  • #43
  • Mar 30, 2010 3:35am Mar 30, 2010 3:35am
I don't! In fact I'm f***king hopeless. Donations welcome.
  • #44
  • Mar 30, 2010 4:08am Mar 30, 2010 4:08am
Hahah i know how you feel Bobsmith. I have tried to find a mechanical edge that would offer signals and i take them without having to think. I tend to think that such a system does not exist (or at least one that will work in all market conditions for a long period). All systems like this tend to rely on the price having to trend a certain amount.
I now am much more discretionary trading pin bars off support in down trends mainly or inside outside bars also incorporating some VSA. Most importantly always with the trend and using the 'hot hand' (pair that moves the most). Getting some success but so important to be ultra picky. In fact i think using this sort of discretionary method- its what you DON'T trade thats so important. Sometimes i trade breakouts too if its a major level at round numbers although i find them a bit stressful.
Does anyone know is there any easy way to find out where BARRIER OPTIONS are placed??
  • #45
  • Mar 30, 2010 5:36am Mar 30, 2010 5:36am
How can people complicate something perfectly simple? If your average win is bigger than your average loss, you're making money.
Measure twice, cut once
  • #46
  • Mar 30, 2010 5:39am Mar 30, 2010 5:39am
Quoting LasVahGoose
An Edge is a system or method that gives a higher probability of one outcome over another with positive expectancy.

You can trade as logical as you want and you can have all the risk management you want, but if you don't have an edge you will lose in the end. This is not directed at you personally, I'm just using your comment as a springboard.
Not entirely correct. You can have a system with (below) 50% probability and still make money with an positive expectancy. Clearly, you need an higher expectancy to compensate if your success-rate is low.
Measure twice, cut once
  • #47
  • Mar 30, 2010 5:49am Mar 30, 2010 5:49am
I imagine there were some flash cars in the parking lot at LTCM before the bailiffs took them all away. The statistics do not necessarily represent the probabilities, and therefore it is impossible to say with any certainty whether you have a long term positive expectancy. That is, until it is proven that you don't.
  • #48
  • Mar 30, 2010 6:00am Mar 30, 2010 6:00am
Quoting aediaz1
How can people complicate something perfectly simple? If your average win is bigger than your average loss, you're making money.
It's not always just the destination that matters, it's the journey too (And I specifically mean DD).
  • #49
  • Mar 30, 2010 8:33am Mar 30, 2010 8:33am
Quoting birdt
I imagine there were some flash cars in the parking lot at LTCM before the bailiffs took them all away. The statistics do not necessarily represent the probabilities, and therefore it is impossible to say with any certainty whether you have a long term positive expectancy. That is, until it is proven that you don't.

And even then it isn't proven.

If a winning run represents positive variance, then a losing streak could easily just be negative variance.

The best you can get is a high statistical confidence.
  • #50
  • Mar 30, 2010 9:04am Mar 30, 2010 9:04am
how to know if i have an edge... i'm edgy sometimes when i'm in a loosing streak.
Success consists of going from failure to failure without loss of enthusiam
  • #51
  • Mar 30, 2010 9:49am Mar 30, 2010 9:49am
Quoting Fx1618
I dont know what is happening in the market. What makes it move or where it will turn. I do have a 4hr chart and I can see that it has a general direction from on side to the next.... low-&-behold, if I open the 1hr chart it has the same patern. I place my trade in that direction with protective stop losses and wola.... after giving the trade some time to mature I have profit.It would be nice to know why the market moves and all the ins and outs, but for know, while still having a day job, this is enough for me.

quite smart,as a trader i think thats enough to know.


otherwise this quest will never end
  • #52
  • Apr 1, 2010 3:18am Apr 1, 2010 3:18am
Quoting mikkom
It's not always just the destination that matters, it's the journey too (And I specifically mean DD).
Absolutely. Its not hard to attract money with decent return and even more decent (low) DD.
Measure twice, cut once
  • #53
  • Apr 1, 2010 4:17am Apr 1, 2010 4:17am
Wow look at that poll, we have more than 50% winners. Who came up with the idea that only 1% or 5% of traders are profitable?
  • #54
  • Apr 1, 2010 4:46am Apr 1, 2010 4:46am
If you make a living out of trading then you have an edge.

Anyway, I had to post on this thread if only for my signature below.
  • #55
  • Apr 1, 2010 5:28am Apr 1, 2010 5:28am
Quoting equilibrium6
LOL.. 67% of traders here responded that they're winning and they're certain that they have an edge.


Now either ForexFactory is inhabited by the brightest forex minds only, or someone lied to me when they told me that only 2% of forex traders make it!


LOL!



edit: btw, while the poll's results obviously have no validity, it does clearly show why most traders have their acc wiped: who would believe that they're losing AND that they have no "secret edge", but would keep on trading and seing his acc vanish? if he keeps trading,...

No need to say anything more.

regards
daytrading
Enter Signature
  • #56
  • Apr 1, 2010 7:43am Apr 1, 2010 7:43am
Yes. ForexFactory is inhabited by the brightest forex minds. No need to say more. Many people here spent years of full-time effort on trading.

In this world, more than 90% people who have ever traded would not make a serious effort before trading. That is the reason most people fail.

Quoting equilibrium6
LOL.. 67% of traders here responded that they're winning and they're certain that they have an edge.


Now either ForexFactory is inhabited by the brightest forex minds only, or someone lied to me when they told me that only 2% of forex traders make it!


LOL!



edit: btw, while the poll's results obviously have no validity, it does clearly show why most traders have their acc wiped: who would believe that they're losing AND that they have no "secret edge", but would keep on trading and seing his acc vanish? if he keeps trading, its...
  • #57
  • Apr 1, 2010 11:06am Apr 1, 2010 11:06am
At the time I am posting this, there are approximately 6000 traders online in FF.

If the poll had any representative value whatsoever, it could lead to the assumption that we can find about 3000 successful traders who are certain about having the edge.

I'll give you that there are certainly some bright minds among the community - including the years of 'full time effort' they might have spent trying to unravel the workings behind consistently profitable trading - but I am very sceptical about the actual real success rate.

You can never know how many of the average 6K community have just joined and how many have given up. Neither can you ever know who is and who is not successful unless you invest and receive a return or suffer a loss.

Audited statements are an option which most in here have declined - and I am not talking of newbies, but according to their own trumpet and some other members, highly successful seasoned traders....I once tried to get some verification of real trading success from fellow members - as a result, I received racist remarks, hate messages and was considered to only have the intention to besmear the reputation of others.

Needless to say, I never saw any real proof of the claimed success of anyone in FF. Maybe I have to look harder - but merely the word is not good enough for me.

So, my question would be: if there are so many bright and successful traders in here, why are they here?

I am only here because random moments of boredom strike me down every now and then....then I see a few people struggling and I think to myself - go and help...it's a good thing to do.

I doubt very much the value of the vast majority of material in here. I guess my age and time in the markets makes me cynical about such places - take what you like from it.

regards
daytrading
Enter Signature
  • #58
  • Apr 1, 2010 11:20am Apr 1, 2010 11:20am
"Whether You Believe You Can, Or You Can't, You Are Right" - Henry Ford.

Whatever you believe, it is true to you.

Quoting daytrading
At the time I am posting this, there are approximately 6000 traders online in FF.

If the poll had any representative value whatsoever, it could lead to the assumption that we can find about 3000 successful traders who are certain about having the edge.

I'll give you that there are certainly some bright minds among the community - including the years of 'full time effort' they might have spent trying to unravel the workings behind consistently profitable trading - but I am very sceptical about the actual real success rate.

You can never know...
  • #59
  • Apr 1, 2010 11:26am Apr 1, 2010 11:26am
Quoting kk007
"Whether You Believe You Can, Or You Can't, You Are Right" - Henry Ford.
Did they used to spout such twee remarks at the Liffe DT?

(Hope you're keeping well).

Dan
  • #60
  • Apr 1, 2010 11:48am Apr 1, 2010 11:48am
I have a few edges. One is that I stuck with one indicator throughout my FX learning process until I thouroughly understood it forwards and backwards. My other edge is that I have a tremendous amount of resilency and selfconfidence that allowed me to trade thru the foggy days when I was losing consistently. Lastly, I am very good at unraveling patterns and remembering them. Patterns are nothing more than a reflection of human behaviour and all traders are creatures of habit.
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