edge init

foorum's been a bit devoid of anything useful recently so I thought I would try and start of a thread that may be beneficial to all.

This thread is all about trading edge's.

Do those of you trading believe you are trading with an edge?

If you think you have an edge how did you come about it? Not asking for details of the edge just how you came about it?

How would you go about finding your own edge? How do you validate an edge?

Maybe some of you believe that you can trade profitably without and edge, you just trade from the gut? If so speak out.

What is an edge anyway? (the simplest way I have heard it described is you are trading with an edge when you have a greater probability of winning over an extended sample). The way I like to think of it is me walking into the Empire Casino in London, pushing all the chinese people out of the way (they love a gamble don't they) to get the the roulette wheel. I blow the dust of my wallet and place £10 on red. The casino has an edge over me, I may win or lose but over an extended sample you would expect them to win as they are trading with an edge.

Can you trade an edge in a discretionary way?

What you sayin?

Consistently win more than you loose, then you have an edge. Just saying you have an edge doesn't make it so. You have got to have a statement to show for it. In order words, if you have a statement to show every day, you definitely have an edge.

I would suggest the following strategy for casino roulette:

1. Set aside for the amount you can afford to loose for the night
2. Bet £1 on red or black
3. If you win, bet all winnings on red or black
4. If you loose, go to 2
5. If you win, go to 3

On a lucky run, you will win a million. If you don't get lucky, you have lots of bets and lots of fun. If you get poor luck, you have lost nothing more than planned. Same principle could be applied to trading.

only took 1 post...

Peter

yep. makes you feel like a one legged man at an ar5e kicking contest.

BJ,
You're never going to find anyone that can produce successive statements over an extended period of time from playing roulette. As the OP says, it's the casino who has the edge - not the punters. Punters can and do win in the short term, possibly even large sums, and they may have an individual bank or other statement to prove it, but that doesn't prove they have an edge. Never has, never will, because it's only the casino that has any kind of an edge (as defined by the OPs highlighted pink text) in the medium to long term.
Tim.

ok, I'll dunk

Having an "edge" always sounds to me like having an advantage over others that they do not possess (like insider knowledge) but I can't better the definition you quote.

I suppose an "edge" can come from a trading set-up that wins more often than it loses; robust money management where gains exceed losses; trade management skills that closes off trades to best advantage (or least worst); an understanding of market participants' behaviour; and a "feel" for the behaviour of your market. Or, probably some combination of those things.

Or, of course, your "edge" might be that you were born under a lucky star

Not winning consistently over the long term is not a certainty. Although the people who win over the long term are small, there is no certainty that says it can't be you. Hence staying in the game as long as you can increases your chance despite the casino's edge. The casino's edge works against the aggregate of all their customers and not necessarily against you. Basically, both the casino and you can be winners simultaneously without violating the laws of probability.

oh god, what have I done...................