The Secret Edge

All

I know that some of you are profitable & some are not, so this is a private poll. No-one can see how you voted, not me, not anyone.

We often hear about 'edge'. As I understand it, 'edge' is some factor, or combination of factors that make you profitable.

Many people claim to have a secret edge. Many people claim to be profitable but then fall back on 'secret edge' to justify why they can't possibly reveal their methods, or they'd have to shoot us.

So - does the 'secret edge' exist. Do most people who are profitable have an edge that they couldn't possibly discuss with people. Is a secret edge what you need to be succesful?

Or is it just a load of old nonsense? Is this just a way for people to claim profitability without having to back it up?

Is it possible you could disclose your full method and it not hurt your edge at all? Is it possible that some people are just good at what they do and that this is their edge, not some set of rules or techniques? Is it possible that they could give their edge to someone else who would fail miserably at it.

Thoughts?

DT

I have seen some people with very secret edges - if they disclossed this edge they would go to prison!
I believe in most cases by disclosing your edge then that edge would dissapear pretty quickly - I have been using some contrarian indicators for example which have been working well...if I were to write a book about them and it became a best seller with lots of people using my indicators then by deffinition they would no longer be contrarion or work! - I think the edge gives you a very slight statistical advantage that could be erroded quickly if too many people start trading on it..
I agree that some people just have the right mixture of personality traits to be great - the right mix of confidence, dissapline and agility and trading is second nature to them (i have only met a couple of people like this - I sadly am not one of them!) - very interesting topic you have raised though!

What I do is so simple that those that I have explained it to are invariably disappointed as they are expecting some magic indicator as they know I make a fair bit of money.

I find it hard to believe that any private trader has a secret edge at all. Perhaps the big money has identified a secret edge that us mere mortals haven't, given our limited resources but that probably won't last long.

disclosing my edge would not hurt my trading.
however, my edge has been honed over a number of years, in increments.

my fear of disclosing my edge is selfishness. I fear that someone else will read what I have done, and do better with it! (its to do with sometimes me passing on good signals, getting out too soon, getting spooked, etc, whereas someone with more confidence might make more money with my system than myself.)

its a secret poll, but I have no problem admitting I chose
"I am profitable - revealing what I do wouldn't make any difference."

Is it possible that some people are just good at what they do and that this is their edge, not some set of rules or techniques? Is it possible that they could give their edge to someone else who would fail miserably at it.

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It's funny you should ask this as it's only been this year whilst getting my head around daytrading that I've realised that the game is about developing the basic competences of identify set-up, execute flawlessly, repeat. The key to identifying a set-up is the development of the cognitive skill from watching the screens. You just can't replace screentime with indicators.

Your edge ironically becomes banal in terms of grail/magical juju and is reflected in the conventional wisdom (run winners, cut losers, trade what you see, follow your plan, listen to the market, look for confluence to support high probability set-ups, etc) which most people then read and subsequently marginalise as being secondary to something else that is 'the edge'.

You then come full circle and realise there's nothing more to it. You also see that many, many others never even get that far because they're spending all their time looking for the edge.

What kind of trading track record would one have to enjoy in order to believe that one had an edge?

One of the best thread titles ever on T2W, I salute you DT... now fook off..

I'm of the Turtles persuasion, " I could nail my *edge* to to the front page of the FT and folk would still mess it up.." because they're not me and I mess up my own edge/head from time to time, so what hope would they have?

Oddly the not sticking to plan is often instinct (such as yesterday when I puked on 4 swings early and it proved to be the right decision)..

Oh btw, I obviously went for option 2

I think there are definite 'secret' edges unavailable to small fries like us.
I also dont believe that we need to know of about them in order to make consistent profits (but it would make it a lot easier)

most people probably cannot trade your secret anyway- they dont have the characteristics for it. nevertheless, why take the risk?

Black Swan said:

One of the best thread titles ever on T2W, I salute you DT... now fook off..

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Anywhere particular you had in mind ?

DionysusToast said:

Anywhere particular you had in mind ?

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sigh..it was a joke in relation to "get lost, I'm not telling.." Never mind, I don't get my own 'humour' sometimes.

At the time of posting 82% of respondants to the poll are claiming to be profitable.

I think either fibbing and/or self-delusion and/or manic optimism is more common than usually assumed.

Maybe I'm just being too cynical.

Vorbis said:

At the time of posting 82% of respondants to the poll are claiming to be profitable.

I think either fibbing and/or self-delusion and/or manic optimism is more common than usually assumed.

Maybe I'm just being too cynical.

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I'm psychotic. Does that count?

Vorbis said:

Maybe I'm just being too cynical.

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Are cynics attracted to forums or do forums create cynics?

redart said:

I think there are definite 'secret' edges unavailable to small fries like us.

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Only edges that I can think that us small people have over the big boys is that we can be pretty nimble getting in and out of trades as our accounts are comparative peanuts and secondly that we don't have to be in the market 100% of the time. These are definately not secret though. Any others?

An edge is an advantage that lowers your risk.

1. Experience - Many develop a feel for the market in general or specific trading instruments in particular and are able to trade successfully with their gut instincts. This takes lots of time and lots of mistakes before the edge kicks in.
   
2. Technical Analysis - works for many traders.
   
3. Insider Information - mostly illegal in the US
   
4. Irreversible Processes - I trade credit spreads with the goal of forming Iron Condors. One of the components of my edge is that time continues forward and the time value of the options I've sold must necessarily decay. There are other considerations to successful credit spread trading, but time decay is it's essential driving force.
   
5. Stuff I don'l know - A universe of undiscovered or nonexistent possibilities.

It is well known on this forum that my trading edge is derived from simple repeating patterns comprised of oscillator extremes/divergence, band deviation, certain fractal geometry and a price action trigger at pre-defined potential support/resistance factors. To this extent I do not have a secret trading edge...What however I consider as proprietary information is the highest probability circumstances (per some simple rules I have devised) under which to act at these set-ups to maintain a very high strike rate (winning trades as a % of total trades) which is one of my trading objectives This I keep to myself or as the OP would call 'secret.' Why do I do this ? Because I have worked long and hard to develop and impliment this trading edge and consider it my intellectual property.

If I were to share my trading edge with others, whilst their learning curve would be no where near the length that was my own, in developing the edge, they would have to commit time and effort in learing the set-ups to the standard of instant real-time recognition and crucially the highest probability circumstumstances rules referred to above. Most 'retail' traders it seems want a 'quick fix' and are not prepared/cannot put in the neccessary screen time to achieve consistent profitability.

The question therefore should be not what is 'secret' but what successful traders consider proprietary information.

BTW: Mark Douglas (Trading In The Zone etc...) argues that a trading edge is something or a set of circumstances that '...suggests a greater probability of one thing happening over another.' That is all it is.

Of course, there is having a trading edge, and being able to execute that trading edge such that it delivers net profitability over the sample. ...but i guess that's another discussion !?

G/L

Maybe I'm just being too cynical.

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As long as you are not being cynical more than 82% of the time then you should be ok


Paul

As one of the other members says in their signature. Trading is war.
I kind of agree with that. Most strategies are known, but it’s about implementing the right one at the right time. So I think the secret edge is yourself, which hopefully will improve with experience.

bbmac said:

It is well known on this forum that my trading edge is derived from simple repeating patterns comprised of oscillator extremes/divergence, band deviation, certain fractal geometry and a price action trigger at pre-defined potential support/resistance factors. To this extent I do not have a secret trading edge...What however I consider as proprietary information is the highest probability circumstances (per some simple rules I have devised) under which to act at these set-ups to maintain a very high strike rate (winning trades as a % of total trades) which is one of my trading objectives This I keep to myself or as the OP would call 'secret.' Why do I do this ? Because I have worked long and hard to develop and impliment this trading edge and consider it my intellectual property.

If I were to share my trading edge with others, whilst their learning curve would be no where near the length that was my own, in developing the edge, they would have to commit time and effort in learing the set-ups to the standard of instant real-time recognition and crucially the highest probability circumstumstances rules referred to above. Most 'retail' traders it seems want a 'quick fix' and are not prepared/cannot put in the neccessary screen time to achieve consistent profitability.

The question therefore should be not what is 'secret' but what successful traders consider proprietary information.

BTW: Mark Douglas (Trading In The Zone etc...) argues that a trading edge is something or a set of circumstances that '...suggests a greater probability of one thing happening over another.' That is all it is.

Of course, there is having a trading edge, and being able to execute that trading edge such that it delivers net profitability over the sample. ...but i guess that's another discussion !?

G/L

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Simple as the above, and in particular the highlighted bits.........no need to be disappearing up ones own **** with this thread....