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What is your edge?

  • #41
  • May 1, 2011 10:35pm May 1, 2011 10:35pm
Quoting belekas
It's a free world and everyone has a right to ask, but I agree with you. Now, if you are making money day in day out, most of the time, for years, then I really doubt you will let the bird out the cage so easily. On the other hand, nobody will give us anything for free in this world. Everything worth something has a price tag on it and usually a big one. It's a life time adventure and only a few us will make it. One thing I can say that learning to read charts will make you more money then reading private forums as time goes by. The crowd cannot...
well I do understand what Cindy is saying , Iv literally been working the markets for years , and spent 100,s of hours looking at the number,s to come to my edge ,, If a fellow trader is not willing to drive ,pursue the knowledge and perspective required then it.s silly( i feel) to just give them a edge . Iam actually not here to make money (nice though when i do)..
trading is not just a mental exercise , but a real exploration of who and what you think you are and most importantly what you fear .. actually great movie , 2005 called revolver , best trading movie i ever seen ..
hope it helps
hemp
Auk,Chicchan,ahau
  • #42
  • May 2, 2011 12:25am May 2, 2011 12:25am
Quoting hempster
well I do understand what Cindy is saying , Iv literally been working the markets for years , and spent 100,s of hours looking at the number,s to come to my edge ,,...
Everybody gets what they want out of the market, Ed Seykota. I like this quote. Once another world famous pro trader said to me: trading cannot be taught, but can be learned. More or less from that time I was hooked and never looked back. By this day I carry around 20k hours of screentime under my belt and it starts to pay off. Came a long way and still have a long way to go. Remember that no dream is to big and sky's the limit

p.s. revolver was not bad, seen it a couple of times.)
  • #43
  • May 2, 2011 12:32am May 2, 2011 12:32am
Anybody solve the McDonald's riddle?
  • #44
  • May 2, 2011 12:50am May 2, 2011 12:50am
Quoting 2+2=4ex
Anybody solve the McDonald's riddle?
Yeah... Mc Donalds give people what they want and as long as the drive through's open people will drive into it apparently

...Profound

I'm sure there's a much deeper message knowing Scotty but he didn't elaborate much more than that.
Time hides Nothing
  • #45
  • May 2, 2011 1:09am May 2, 2011 1:09am
Quoting CindyXXXX
Yeah... Mc Donalds give people what they want and as long as the drive through's open people will drive into it apparently...
Jesus. What does that have to do with forex??
  • #46
  • May 2, 2011 1:27am May 2, 2011 1:27am
Quoting 2+2=4ex
Jesus. What does that have to do with forex??
Well all I can say is that the obvious answer to that seems a little too obvious so your guess is as good as mine
Time hides Nothing
  • #47
  • May 2, 2011 6:23am May 2, 2011 6:23am
Quoting highlander2
its one thing to have a statistical edge, its another thing to make money with it.

But are you will to share this edge? I assume it's something to do with momentum/price action, will you explain it in more detail and explain how you know that it works?
  • #48
  • May 2, 2011 1:00pm May 2, 2011 1:00pm
Quoting Davidee
But are you will to share this edge? I assume it's something to do with momentum/price action, will you explain it in more detail and explain how you know that it works?
Sure its no secret, simple price action patters, mainly pins and inside bars. sure im not doing 1000% per month, but im working away and making money.

its descretionary so it cant really be statistically validated or backtested, i can only say that it works from trading records.
  • #49
  • May 2, 2011 1:23pm May 2, 2011 1:23pm
i believe people in their quest to predict the future come up with so many unnecessary chart clutter, or faith on lines.

the edge is to look at the overall market structure and see the two sides of every trade. Use the things that we know for sure, to give us better strategic positioning.

what are the predictable things about the market that we all know about?

1 the market moves in three ways: Trending bullish, Trending bearish, or consolidating topping/or pausing.

2 the market moves in waves, for every strong directional move it will be eventually be followed by a counter wave.

3 the market is pegged to the US dollar and most of what the majors do are affected by the strength or weakness of the dollar.

now how you use this and what strategy you device is up to you.
indicators are great if you know HOW to use them and WHEN NOT to use them. Learn to use your account balance as tool to manage risk.

understand that Time frames are not different from one another but as below so above. the 1minuet are close to the market pulse, understand that 5 minute candles are composed of 5 1 minute candles, 1 hr candles are composed of 60 one minute candles and 12 five minute candles. the daily is nothing but 1440 one minute candles and 288 five minute candles, 24 one hour candles.

so if you are a price action person don't go looking for pin bars or reversal candles, understand the price within the candle and the area in the chart according to market structure
AVT INVENIAM VIAM AVT FACIAM
  • #50
  • May 2, 2011 4:37pm May 2, 2011 4:37pm
About 21 is if you are able to count cards.
Edges about trading are:
1) paying less possible commissions.
2)Seeing both side( ask and bid) of the market: mms specialists dealers.
3) Insider trading.
  • #51
  • May 2, 2011 5:33pm May 2, 2011 5:33pm
dont have to be a dealer to make money, dont need insider info

you need skills
AVT INVENIAM VIAM AVT FACIAM
  • #52
  • May 2, 2011 8:00pm May 2, 2011 8:00pm
Quoting the redlion
dont have to be a dealer to make money, dont need insider info

you need skills
You need a correct paradigm by which to view the market. I suppose this could be described as a skill. There is not just one paradigm, the most important thing is that your method makes total sense to you so that when you open a trade you have little doubt in your plan. You should obviously see consistent profits also. Those two things always go hand in hand for the successful trader (as opposed to the lucky trader). A successful trader first see's the story,then makes his bet, and finally watches closely to see that story unfold.
  • #53
  • May 2, 2011 9:42pm May 2, 2011 9:42pm
Quoting Davidee
As everyone here knows, trading without an edge will always lead to failure. To be successful at trading you need to have a trading strategy with an edge and an appropriate risk management strategy to ensure you stay in the game long enough to get ample opportunities to apply your edge and realise your winnings.

I wrote a little article about it on my blog in response to an email I got. The article is called Trading Strategies That Work if anyone is interested...
I dont mean to sound rude, but you and quite a few other in this thread don't seem to understand what an, "edge," is as far as trading goes.

Trading with the trend and support and resistance (or some indicator or gizmo or MA approach) and things of that nature are not an edge in and of themselves. Those are techniques that you can use to put together an edge.

An, "edge," in trading is NOT some percieved advantage a trader thinks he has, like, "I got this great indicator," or, "I have 8 years trading experience."

And edge is a complete trading strategy that wins more times than it loses, AND with money managment the winners outstrips the losers. It's the same definition as in a casino playing table games.

You don't have an edge until you've executed a large number of sample trades the exact same way (between 100-1000) AND established your win/loss ratio AND average win/loss. And of course in the end wins vs losses you come out ahead.

It's an edge when all these things are good because you can keep playing the casino and come out ahead despite losses.....hence an edge.

Simply using S&R and trend is and of it'self is NOT an edge, they are techniques that can be used as components to make up an edge.

Simply trading S&R and trend doesn't give you any real edge by itself.
  • #54
  • May 3, 2011 1:07am May 3, 2011 1:07am
Quoting KumoDragon

And edge is a complete trading strategy that wins more times than it loses, AND with money managment the winners outstrips the losers. It's the same definition as in a casino playing table games.
In general I agree with your post, except for the point I marked in bold. You don't need to win more times than you lose.
Positive expectancy or an edge is made up of win/loss ratio and risk/reward ratio. It's a combination of the two. Thus if you have a high risk/reward, you can actually have a low win/loss and still have an edge.
  • #55
  • May 3, 2011 6:46am May 3, 2011 6:46am
Quoting KumoDragon
Simply using S&R and trend is and of it'self is NOT an edge, they are techniques that can be used as components to make up an edge.
The irony is many still and do believe this is all thats needed to be consistent.

Or they'll "argue" its "discretion" blablabla when discretion is nothing more than rules that havent been "verbally defined".

I like your post.
  • #56
  • May 3, 2011 12:36pm May 3, 2011 12:36pm
Quoting Custos
In general I agree with your post, except for the point I marked in bold. You don't need to win more times than you lose.
Positive expectancy or an edge is made up of win/loss ratio and risk/reward ratio. It's a combination of the two. Thus if you have a high risk/reward, you can actually have a low win/loss and still have an edge.
Yep tottally agree. Technically that is 100% correct.

But, other than very long term trend traders that stay in for 1000's of pips, you'd be hard pressed to find a trader who could stick with an edge that loses 9 out of 10 but comes out ahead in the end.

Also with a very bad win/loss ratio, if you happen not to be trading the time that your edge wins, you've just scewered the whole edge out of balance.

But, that wasn't the really the point of my post, it was just to point out what an, "edge," actually is when you talk in terms of day trading.
  • #57
  • May 3, 2011 12:57pm May 3, 2011 12:57pm
Honestly, I think Davidee was essentially asking people about the "components of their edge".

While KumoDragon's argument of semantics and definitions might be correct...

I don't think Davidee was asking for posts similar to...

My edge is a profit factor of 1.23 with expectancy of $2.45 per trade
on an account of $10,000 over a period of 2 years with 3,186 trades.
Largest peak-to-valley drawdown of 8%, with largest individual losing trade of less than 3%.
(just an example)
  • #58
  • May 3, 2011 1:04pm May 3, 2011 1:04pm
Quoting Intu
Honestly, I think Davidee was essentially asking people about the "components of their edge".

While KumoDragon's argument of semantics and definitions might be correct...

I don't think Davidee was asking for posts similar to...

My edge is a profit factor of 1.23 with expectancy of $2.45 per trade
on an account of $10,000 over a period of 2 years with 3,186 trades.
Largest peak-to-valley drawdown of 8%, with largest individual losing trade of less than 3%.
(just an example)
Nice could you please provide the strategy rules for this (-:
  • #59
  • Edited 1:37pm May 3, 2011 1:22pm | Edited 1:37pm
Sorry to get you excited.
Those are NOT my results. That was just an example post.

Quoting Intu
(just an example)
related to KumoDragon's definition of an edge...

Quoting KumoDragon
And edge is a complete trading strategy that wins more times than it loses, AND with money managment the winners outstrips the losers.

You don't have an edge until you've executed a large number of sample trades the exact same way (between 100-1000) AND established your win/loss ratio AND average win/loss. And of course in the end wins vs losses you come out ahead.

Simply using S&R and trend is and of it'self is NOT an edge, they are techniques that can be used as components to make up an edge.
Back on track-

Quoting Davidee
My question is: what's your edge, how do you apply it and how do you know that it really works?
  • #60
  • Last Post: May 3, 2011 2:09pm May 3, 2011 2:09pm
Quoting Intu
Honestly, I think Davidee was essentially asking people about the "components of their edge".

While KumoDragon's argument of semantics and definitions might be correct...

I don't think Davidee was asking for posts similar to...

My edge is a profit factor of 1.23 with expectancy of $2.45 per trade
on an account of $10,000 over a period of 2 years with 3,186 trades.
Largest peak-to-valley drawdown of 8%, with largest individual losing trade of less than 3%.
(just an example)
Exactly right, thanks Intu.

My trading style involves targeting areas of support and resistance on the S&P 500, right now I'm only taking long trades on the S&P 500. I'm not in an S&P trade right now, I'm watching it fall and soon, possibly in the next few days I'll take a long trade and hold it until it makes closes above a 3 day high which typically produces a profit, profits tend to be the size of losses and almost twice as frequent. I did a simple test on 11 years of data to produce evidence (not conclusive proof) that this type of thing works on the S&P 500.

I also take EUR/USD trades too, but those are much longer term, the signal for those tend to be higher highs for longs and lower lows for shorts. This doesn't work on the S&P 500. Here is an example of a EUR/USD trade that worked out that I did live on Forex Factory posting updates, although I broke my own rules and missed out on some profit I did get over 400 pips and one of the other posters following it got 600 pips I think http://www.forexfactory.com/showthread.php?t=257177 Again, I produced what I considered to be evidence that trading new significant highs and lows worked on the EUR/USD in the article I asked for comments on.
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