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Where is the EDGE in trading? The most important thing in trading!

  • #361
  • Aug 9, 2011 10:24pm Aug 9, 2011 10:24pm
Quoting TraderinSD
It has taken me personally 10 years, 1000's of dollars, a marriage, etc... to become profitable.
Respect.
  • #362
  • Aug 10, 2011 12:23am Aug 10, 2011 12:23am
Quoting reres
Lets say that we solve all the problems with traders psyhology and money managment. Lets say money managment is perfect and the trader is trading like a robot. Knowing that trading is just a probability game and not having problems accepting losses.

Than to make a profit he still needs to have an edge. Just like casino has an edge and it doesnt care if someone wins a jackpot once in a while.

So where excatly is an edge in trading??

1) Technical analysis doesnt work! All indicators are lagging and produce random results due to the fact that...
'
Not sure if it's already been mentioned but points 1 and 2 are the same thing (PA and TA) but anyway. I think what you mean is that "you can't get it to work for you" either that or someone has told you it doesn't work and you were stupid enough to believe what someone tells you on a trading forum. Personally I can't get plain TA (on it's own) to work profitably for me but others claim they can so whatever the truth if there is one doesn't concern me.

Either way the edge is really in your desire to cut the shit and find what works for you. It could be in Fundamental analysis or some form of technical analysis, hopefully it's a combination of both but these are just words to me.

I think most beginning traders are brainwashed in a way with this definitive thought process that wants to systemize everything and define every word so it fits neatly into a little box. I guess it's just the way we're taught to think. This is where IMHO most of the tail chasing begins.

The edge is really in you, your desire, your intelligence, your persistence, your honesty (with yourself). Then from here the real edge as in the one that utilizes the mechanics of the market to make money for you should follow (in time).

To me an edge in trading is simply something that takes advantage of the countless opportunities the market throws at you everyday. Most don't see them, or know how to see them but with the above pointers, hopefully one day you will understand where I'm coming from. I'm not going to tell you where my edge is other than the fact that I let the market (the real market) tell me where the opportunities may lye.

There's a massive difference in letting the market speak to you, rather than trying to force your own ideas onto it in the hope for profit. If you think of it as a conversation one is talking to you, the other you are talking to it. The latter will never work.

Utilize the tools available to you combined with your knowledge and a little common sense and just start trading. When you need more knowledge GET IT.

That's me
Time hides Nothing
  • #363
  • Aug 10, 2011 1:03am Aug 10, 2011 1:03am
Quoting CindyXXXX
I'm not going to tell you where my edge is other than the fact that I let the market (the real market) tell me where the opportunities may lye.
The "real market", eh? Oh I like that agent Mulder, sure, sure, the truth is out there....
Inserted Video
  • #364
  • Aug 10, 2011 1:07am Aug 10, 2011 1:07am
Quoting Mr Breakout
The "real market", eh? Oh I like that agent Mulder, sure, sure, the truth is out there....
http://www.youtube.com/watch?v=JDZBgHBHQT8
lol - Actually no, the truth is not out there and you're all screwed and the markets are all rigged, if that's what you wanted to hear.

I mean as in the real world, not just the world confined to an MT4 chart. That's just what helped me personally break the mold I was stuck in a long while ago.

I could honestly write pages on this thread topic but why would I? Ask a broad question and I guess you get a broad answer. Take from it what you wish.

haha I liked the X files touch there lol
Time hides Nothing
  • #365
  • Aug 10, 2011 1:18am Aug 10, 2011 1:18am
Quoting CindyXXXX
I think most beginning traders are brainwashed in a way with this definitive thought process that wants to systemize everything and define every word so it fits neatly into a little box. I guess it's just the way we're taught to think. This is where IMHO most of the tail chasing begins.
A more insightful post will be hard to find here!!

People get inundated with the thoughts of being able to trade 3 minutes per day and quit thier job, or a set-it-and-forget-it EA that makes you rich while you are at the beach. They forget that to trade effectively you have to learn to trade effectively!

If I would have gotten on a forum as I was learning to trade options or currency, I have no doubt that I would not be as successful as I am now, because I am doing what the "experts" say can not be done or will not work or I shouldn't do at all. But since I didn't know any better, I became a pretty good short term trader.

My advice to new traders on forums: don't listen to ANYONE that only talks in absolutes, because there are none.

Hmmm....maybe I'll start my own thread one day....
  • #366
  • Aug 10, 2011 1:22am Aug 10, 2011 1:22am
Quoting CindyXXXX
lol - Actually no, the truth is not out there and you're all screwed and the markets are all rigged, if that's what you wanted to hear.

I mean as in the real world, not just the world confined to an MT4 chart. That's just what helped me personally break the mold I was stuck in a long while ago.

I could honestly write pages on this thread topic but why would I? Ask a broad question and I guess you get a broad answer. Take from it what you wish.

haha I liked the X files touch there lol
Relax Cindy, just kidding
  • #367
  • Aug 10, 2011 1:28am Aug 10, 2011 1:28am
Quoting Mr Breakout
Relax Cindy, just kidding
lol I know mate Hey Mr B we miss your tunes in the music thread. The X files one would be good to trade to actually!
Time hides Nothing
  • #368
  • Aug 10, 2011 1:31am Aug 10, 2011 1:31am
Quoting CindyXXXX
I think most beginning traders are brainwashed in a way with this definitive thought process that wants to systemize everything and define every word so it fits neatly into a little box. I guess it's just the way we're taught to think. This is where IMHO most of the tail chasing begins.
everything a person ever does is a form of system. we don't just randomly do shit for no reason. cause and effect!

the problem is when muppets want to associate the effect to some retarded bullshit cause. cutting the bullshit and discovering the real cause.... ie EDGE... is not folly.

no really, ask me if i want my palm or tea-leaves read!
Congratulations ScalaFX for coming out of the closet!
  • #369
  • Aug 10, 2011 1:35am Aug 10, 2011 1:35am
Quoting moneymaker2

My advice to new traders on forums: don't listen to ANYONE that only talks in absolutes, because there are none.

Hmmm....maybe I'll start my own thread one day....
Thanks for that, I tend to agree but would that be an absolute? lol

The other thing is nothing can be proven unless you test it yourself. I stopped listening to pretty much anyone on these forums a long time ago and it helped me open my mind a bit. There are a lot of people here who have helped see things I didn't before and may not have without them but they are few and far between. Most people just want to make sure everyone else thinks they are intelligent and profitable (the truth is always unknown).
Time hides Nothing
  • #370
  • Aug 10, 2011 1:39am Aug 10, 2011 1:39am
Quoting nubcake
everything a person ever does is a form of system. we don't just randomly do shit for no reason. cause and effect!

the problem is when muppets want to associate the effect to some retarded bullshit cause. cutting the bullshit and discovering the real cause.... ie EDGE... is not folly.

no really, ask me if i want my palm or tea-leaves read!
Well yeah you can confuse it like that if you wish.

Here we go Nubcake I can see your mouth watering at the chance to start another pointless debate so I will stop here and agree that yes my post was broad and perhaps contradictive (not a word?) in a technical way but those are just my thoughts.

Go ahead and find all the negatives in it. Or perhaps you could search a little further and find something positive in it. The choice is always yours.
Time hides Nothing
  • #371
  • Aug 10, 2011 1:53am Aug 10, 2011 1:53am
Quoting CindyXXXX
Well yeah you can confuse it like that if you wish.

Here we go Nubcake I can see your mouth watering at the chance to start another pointless debate so I will stop here and agree that yes my post was broad and perhaps contradictive (not a word?) in a technical way but those are just my thoughts.

Go ahead and find all the negatives in it. Or perhaps you could search a little further and find something positive in it. The choice is always yours.
arrogant.
Congratulations ScalaFX for coming out of the closet!
  • #372
  • Aug 10, 2011 2:01am Aug 10, 2011 2:01am
Quoting nubcake
arrogant.
Well... I agree that everything can be put down to some sort of system of thought or process and without this we simply couldn't profit in the markets.

That is a very technical way of picking apart the point I was trying to make.

System is just a word.

I'm not an arrogant person.

And on that I will say that I systematically do things I guess I have a systematic way in which I approach things personally but I couldn't put it down to an A+B = C everyday type thing. Maybe one day I could... I'm not saying this doesn't work I know Jag successfully trades a system like this. There's no ONE way to trade. It goes back to simplicity:

Learn to identify the opportunities the market offers you and trade them - There's countless ways this could be done and infinite ways in which it can't. If you can do that with 2 MA then more power to you. I cannot.
Time hides Nothing
  • #373
  • Aug 10, 2011 3:11am Aug 10, 2011 3:11am
Quoting TraderinSD
It has taken me personally 10 years, 1000's of dollars, a marriage, etc... to become profitable.
I swear to God, if playing this game threatened my family I'd ditch it in a heartbeat.

Sounds like you're an addict. Get some help.
  • #374
  • Aug 10, 2011 3:14am Aug 10, 2011 3:14am
Quoting AllanS
I swear to God, if playing this game threatened my family I'd ditch it in a heartbeat.

Sounds like you're an addict. Get some help.
LOL. I'd ditch the family and buy a new one with my millions. Hahaha!
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #375
  • Aug 10, 2011 3:24am Aug 10, 2011 3:24am
Quoting AllanS
I swear to God, if playing this game threatened my family I'd ditch it in a heartbeat.

Sounds like you're an addict. Get some help.
It isn't a game, it is a business.
  • #376
  • Aug 10, 2011 3:31am Aug 10, 2011 3:31am
To me the edge is not only a single edge, its a combination of a lot of small factors that together have synergistic effects.

For me technical analysis is a must for good trading, but it is very ineffective without at least some fundamental data - to make sure the movement is based on more then someone buying/selling a lot randomly.

To be able to play with price action is maybe the most important edge, since it enables you to buy cheap and sell expensive. This does not only maximize your profits but also lets you use a smaller stop loss.

But other things give you an edge too - keep in mind, its humans that are trading (unless you have only EA's going for you) meaning you get an edge over other human traders if you find ways to stay concentrated longer, to improve your focus, to keep emotionless no matter what happens.

These factors are what I would say are a definitive edge.
  • #377
  • Edited 8:09am Aug 10, 2011 7:56am | Edited 8:09am
Quoting Mr Breakout
Net Profit : $423,396
Maximum drawdown: $78,195

A trader trading only 4 contracts per trade could have made $102,641 a year during 16 and a half years with this simple Bollinger Band system.
Dont be silly. A trader trading 4 contracts would have had 320 000 max drawdown so it would blow his account.


Quote
I can post the backtest of other profitable technical indicators(Macd, Cci, etc...) but what's the use.
I dont doubt this test is sincere but it would be nice to test it until 2011 at least. To see the difference. Or was the performance getting worse since 1999 so you decided to cut it off? Any backtest data can be made to fit an specific example. Just saying
  • #378
  • Edited 8:11am Aug 10, 2011 8:00am | Edited 8:11am
Quoting moneymaker2
Well, no wonder you can't get anything to work...it looks like you just put indicators on your chart until it won't fit any more. You need to at least have the indicators using the same period....and would probably be good if you knew what each indicator actually meant.
Quoting Price
reres... is that your chart setup ?? The S&P 500 chart.... cause if it is, I can totally see now why you feel that TA and anything to do with it is completely worthless. That right there aint how it's done IMO. That's just indicator paralysis. (Of course, if it works for you, great - but I'm guessing it doesn't)

You know, it's OK to abandon previous beliefs. No shame in becoming open to new ideas. When you're ready, we can all set aside the trash talk, and even begin/resume some meaningful discussions..... When you're ready.

Lol no thats not my setup. Thats some pic from google. I was just pointing out to jag1966 how absurd his trading indicators look like. Anyway...this thread should be going in the right direction from now on.

What Mr Breakout posted was not so bad but i wonder why is it the case that those strategies that look good when backtested usually dont work in live trading?
  • #379
  • Aug 10, 2011 8:12am Aug 10, 2011 8:12am
Quoting reres
Lol no thats not my setup. Thats some pic from google. I was just pointing out to jag1966 how absurd his trading indicators look like. Anyway...this thread should be going in the right direction from now on.
I traded gu short twice using NAKED CHARTS. So did two of the guys I teach.

What is it you don't understand when I say I use naked charts with NO INDICATORS?
Attached Image (click to enlarge)
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  • #380
  • Aug 10, 2011 9:39am Aug 10, 2011 9:39am
Quoting nubcake
everything a person ever does is a form of system. we don't just randomly do shit for no reason. cause and effect!

the problem is when muppets want to associate the effect to some retarded bullshit cause. cutting the bullshit and discovering the real cause.... ie EDGE... is not folly.
Long story short... ^^^^^
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