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

  • #541
  • Aug 13, 2011 7:45pm Aug 13, 2011 7:45pm
Quoting newyear498

wake up and smell the coffee you are the edge.

What do you mean by that?
  • #542
  • Aug 13, 2011 8:04pm Aug 13, 2011 8:04pm
morning all,so do you guys/gals trade are are you looking for the holy grail ie looking for the mighty edge
SEE LINE,TRADE LINE..PRICE HAS TO GO SOMEWHERE,,, PRICE WILL GO SOMEWHERE.
  • #543
  • Aug 13, 2011 8:07pm Aug 13, 2011 8:07pm
Its funny.. people can argue forever about an "edge" yet never understand how to actually trade even if they had one.
  • #544
  • Aug 13, 2011 8:13pm Aug 13, 2011 8:13pm
Quoting EmeraldEyes
Its funny.. people can argue forever about an "edge" yet never understand how to actually trade even if they had one.
You mean they have no discipline?
  • #545
  • Aug 13, 2011 8:21pm Aug 13, 2011 8:21pm
i agree emeraldeyes. the only problem i have trading is if i actually sit at the pc and see it happen. i normally sell/buy too early but if i walk away and let the process go on hey presto i win (more often by far)
SEE LINE,TRADE LINE..PRICE HAS TO GO SOMEWHERE,,, PRICE WILL GO SOMEWHERE.
  • #546
  • Aug 13, 2011 8:42pm Aug 13, 2011 8:42pm
Quoting Mr Breakout
You mean they have no discipline?
I mean that most of us do not understand how to trade without a chart and some numbers moving on a screen. Brokers know this and exploit us retail guys so we can provide other's liquidity by showing low spreads, ease of use, the money to be made with leverage, and HEY its open 24/5. Boom! Its no different than a casino that gives the dealers weekends & holidays off.

Trading forex is much more than a R:R ratio. Its macroeconomics at play.. countries rising & falling, debt issues, monetary policies, natural disasters.. to name a few. No one knows what's going to happen, trading stats don't mean anything but a glimpse of past performance at that point in time. When we realize how to really trade, then these various edges discussed will be more than enough to become profitable.
  • #547
  • Aug 13, 2011 8:51pm Aug 13, 2011 8:51pm
Quoting EmeraldEyes
I mean that most of us do not understand how to trade without a chart and some numbers moving on a screen. Brokers know this and exploit us retail guys so we can provide other's liquidity by showing low spreads, ease of use, the money to be made with leverage, and HEY its open 24/5. Boom! Its no different than a casino that gives the dealers weekends & holidays off.

Trading forex is much more than a R:R ratio. Its macroeconomics at play.. countries rising & falling, debt issues, monetary policies, natural disasters.. to name a few. No one knows...

that is correct!!! most systems attempt to predicting price at certain levels or where it will reverse, the problem is that no one really knows what will happen in the future, the market moves tick by tick and each tick reflects the price NOW.

so you end up where you started, what will happen next? no one knows for sure, but using the information presented to calculate and estimate possible direction, and taking advantage of this is what makes the money.

monetary policy, politics, interest rates, and knowing the market, can certantly give you an edge on where your directional bias should be, then objective analysis psychology and recognizing when your guess, was wrong and how to trouble shoot it if possible, can also give you an edge.

when to trade, when to press, when to hold, when to liquidate, when to troubleshoot, and when to stay out, as well as understanding when your opinion was wrong. plays a key role, this is all done tick by tick and understanding that one can be right but be ill timed, one can be right initially.

scalp, hold mid or long term, average, scale in, scale out.

so many choices, it becomes an art, a skill. no simple predicting indicator or algorithm can give you the edge, you carve out your edge from your experience
AVT INVENIAM VIAM AVT FACIAM
  • #548
  • Aug 13, 2011 9:06pm Aug 13, 2011 9:06pm
Quoting Mr Breakout
What do you mean by that?
The secret of the Dragon Scroll.
Inserted Video
  • #549
  • Aug 13, 2011 10:23pm Aug 13, 2011 10:23pm
Quoting Vorbis
This is a very interesting area of enquiry. Do you know of any such studies? If so I would be grateful if you could point me in the direction of the evidence, thank you.
See the attached pdf file.
Attached File(s)
File Type: pdf Trend or No.pdf   47 KB | 625 downloads
  • #550
  • Aug 13, 2011 10:25pm Aug 13, 2011 10:25pm
Quoting the redlion
that is correct!!! most systems attempt to predicting price at certain levels or where it will reverse, the problem is that no one really knows what will happen in the future, the market moves tick by tick and each tick reflects the price NOW.
Trading has nothing to do with predicting anything, it is simply a question of finding a statistical edge (through observation and testing) and exploiting it.


Quoting the redlion
no one knows for sure
Trading is a probability game, you will never be certain of the outcome of the trade but if your system is good then you are simply playing the odds, just like the owner of a casino.

Quoting the redlion
so many choices, it becomes an art, a skill. no simple predicting indicator or algorithm can give you the edge, you carve out your edge from your experience
Not at all, there is no art involved here, just follow the rules of your backtested system and you will make money, there is no thinking here, no choice, no nothing, just buy/sell when your system gives you a signal.
  • #551
  • Edited 11:16pm Aug 13, 2011 10:39pm | Edited 11:16pm
Quoting Oodr
See the attached pdf file.
These poor backtests were made without a stop/take profit of any kind, in other words the trader is always long or short, no wonder they give those weird results. A simple volatility stop and trailing stop could have generated an entirely different outcome.

The author of this "study" is also talking about trading exotic currencies like the Brazilian Real or the Rubble. Yeah right, try to daytrade these currencies when you have a 50 to 400 pip spread right from the start. Right now the South African Rand (USD/ZAR) for example has a 204 pip spread on the FXCM platform. That means you need to make 204 pips just to break even. Pfft, piece of cake.
  • #552
  • Aug 14, 2011 12:34am Aug 14, 2011 12:34am
Quoting FX-Petra
What's up, Goose?! Good to see some of your posts again. I keep dropping back in on this thread, wondering if I should dip my toe in and try to offer something of use. I see that you are giving it a try. I admire you for that! I seldom try anymore... not wanting to get into web agruments anymore. Maybe I should dust myself off and get back in there and try and offer some help. A lot of old guys helped me.

Good trades to you!!

Regards,
I appreciate the kind words. I totally understand what you mean, FF has changed a lot over the years.
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #553
  • Edited 1:20am Aug 14, 2011 1:06am | Edited 1:20am
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...
Why I got an hitrate from more then an avg as 75 % since over 1,5 years ???????????? (there was the click - I start with about 70% - now it is about 80%)

may it was luck - oh sh*** -

there is little bit true on you story but not complete all

just my 2 cent

What is the EDGE in trading ??????????????

my own definition

u have to know

your hitrate - then u can adapt - your mm/rm - and finaly u can choose the leverage.

u start to plan

""maybe too simple - but for me it works""
enigma4x
enjoy my life ... and ride the waves - all what I do
  • #554
  • Aug 14, 2011 1:14am Aug 14, 2011 1:14am
Quoting Mr Breakout
If you flip a coin and Head comes up, what is the probability of getting ANOTHER Head? 50%

On the other hand, if the market moves 100 pips in one direction, what is the probability of seeing another 100 pip move in the same direction? Now if you answer 50% then your ignorance is beyond belief!! It is NOT 50%, it is MORE than 50%.
Lol.

For example, it is commonly quoted that stock and futures markets
trend ONLY about 30% of the time.


In forex if you take the most trending currency pairs like gbp/usd or gbp/jpy then % is highier but i dont think its over 50% in any way.

So the strategy you described can perhaps be applied in reverse.




  • #555
  • Aug 14, 2011 1:21am Aug 14, 2011 1:21am
Quoting reres
Lol.

For example, it is commonly quoted that stock and futures markets
trend ONLY about 30% of the time.


In forex if you take the most trending currency pairs like gbp/usd or gbp/jpy then % is highier but i dont think its over 50% in any way.

So the strategy you described can perhaps be applied in reverse.




what? gbp/usd and gbp/jpy are the most trending pairs? Are you living behind the moon?

that's the problem you don't think that it's over 50%. You have absolutely no idea if it is or if it is not. A lot of traders are just trading on beliefs and what they think should work.

Very rarely do you find traders that know something for sure, obviously cause it takes a tremendous amount of work and unbiased research to be able to know something, especially in the forex arena.

For somebody that doesn't know anything and just has some beliefs about the market, you surely are very ignorant and arrogant.
Maybe instead of arguing with people, open an excel sheet and collect data and analyse it. That is a much more efficient use of your time.
  • #556
  • Aug 14, 2011 1:29am Aug 14, 2011 1:29am
Quoting Mr Breakout
I am pretty sure we are talking about the same thing but the way you express it is not correct. A payout of 2:1 means you are risking 100 pips (for example) to make 200 pips. And yet you could still win only 25% of the time, if your system is a losing system.
Yes. But with 2:1 you only need to be correct 33% of the time. So if a system is only correct 25% of the time you can adjust the r/r to compensate. It's basic math. I don't understand why people don't get this.
  • #557
  • Edited 1:41am Aug 14, 2011 1:30am | Edited 1:41am
Quoting Custos


what? gbp/usd and gbp/jpy are the most trending pairs? Are you living behind the moon?
You made a fool out of yourself yesterday and now again. Show me the currency that is trending more than those 2 historically.


edit: Maybe u can add aud/jpy to the list but thats about it...those are the most trending



Quote
Very rarely do you find traders that know something for sure, obviously cause it takes a tremendous amount of work and unbiased research to be able to know something, especially in the forex arena.


On the other hand to proove his point he would also have to provide some evidence that there are really trends happening more then 50% of the time. He just said it happens....thats a belief you are describing.
  • #558
  • Edited 2:28am Aug 14, 2011 1:31am | Edited 2:28am
Quoting JR97
Yes. But with 2:1 you only need to be correct 33% of the time. So if a system is only correct 25% of the time you can adjust the r/r to compensate. It's basic math. I don't understand why people don't get this.

right but the most important part is to have to know

u have to know - sound simple but it isn´t - one of the hardes work for a trader in my opinion (beside to work on his psycho - 70% of trading). It needs time and work too.

John Bolling was saying an very wise sentence.

Find your system and trade it!!!!!!!!!!!! Not more - that is hardest part for the most.

("It begins: -> for example whith that fact " the hitrate depends on the rr - in most of my known tradingsystems ... blah blah" )

How was first the eggs or the chickens? the old quest...

may it is 30% or what ever ...

the most beginners don´t know

but why ? there are a lot of reasons. it is to hard for me to write - I see no sense for it too

bye so far.

oh sh.. I know I´m right

enigma4x
enjoy my life ... and ride the waves - all what I do
  • #559
  • Aug 14, 2011 1:41am Aug 14, 2011 1:41am
Quoting reres
Why dont you read carefully? You made a fool out of yourself yesterday and now again. Show me the currency that is trending more than those 2 historically.

"In forex if you take the most trending currency pairs like gbp/usd or gbp/jpy then.... "

Yes.



On the other hand to proove his point he would also have to provide some evidence that there are really trends happening more then 50% of the time. He just said it happens....thats a belief you are describing.
Funny, didn't realize I made a fool out of myself, I thought it was you

Take usd/chf, gbp/chf and eur/chf. Now if those are not trending much more than gbp/usd and gbp/jpy, then I don't know.

You are really a "special" individual.

I also don't understand why you require proof from people that did their homework. Is it because you are too lazy to do it yourself? And you think people give things for free? Get real.
  • #560
  • Aug 14, 2011 1:47am Aug 14, 2011 1:47am
Quoting Custos
Take usd/chf, gbp/chf and eur/chf. Now if those are not trending much more than gbp/usd and gbp/jpy, then I don't know.
euro/chf?? Historically it has been the most range trading currency. Or have you come to the world of forex in last few monhts only? I guess ur new to this fx.


Quote
I also don't understand why you require proof from people that did their homework. Is it because you are too lazy to do it yourself? And you think people give things for free? Get real.
To support any claim there has to be some proof. You just believe he did research and you just believe fx markets are trending more than 50%. Thats ignorant and stupid. Get real.
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