Do you have an Edge ?

I think most people agree the markets are highly efficient and chaotic/random (different schools of thought on this).

If you are expanding time to trade/invest in the market then you expect a return on your time. In order words, you expect to make more money than just passively investing in a broad index or group of securities. A professional might say, how are you creating your Alpha which simplistically stated is the return you are creating above a benchmark that matches your risk.

I prefer the simple Question of…what is your Edge ?

I have started this thread for people to be able to discuss their Edge(s).

There are many ways of viewing the market and different types of Edges...including Instinct, Technical Analysis, Fundamental, Quantitative, Astrology, Combinations of all of these, etc, etc

To narrow it down the focus should be on Trading as opposed to long term investing, where trading is defined by a timeline from seconds to days.

What is your Edge and how do you repeat it ? Has it actually gained you a greater return than just a corresponding benchmark.

For me personally, my preference is towards systematic/automated trading with a repeatable edge. Anything that requires an emotional/instinctive feeling I find hard to repeat reliably as I get to caught up with the "emotion" of the market. For instance I am currently exploring:
Options. Predictable Implied volatility movements(eg. earnings) for listed USA options.
Equities. Since a high % of institutional trades are VWAP/TWAP related, how can this be used to find high probability opportunities.

Some Qs for you…
Can you clearly define your edge ?
How did you find it ?
Is it something you can teach someone else or is it based on instinct/experience ?

Look forward to discussing with you all…because with the very little that I know, I do know that you need an Edge.

Please remember there is no wrong/right answer/approach, it all depends on the trader. The market will supply the real answer…eg. Do you have a real edge ?

Do you have a real edge?

Yes.

Can you clearly define your edge?

Not clearly because it is comprised of so many things such as logic, reason, analysis, courage and intuition.

Can an edge be taught?

No.

AnEdge said:

what is your Edge ?
Some Qs for you…
Can you clearly define your edge ?
How did you find it ?
Is it something you can teach someone else or is it based on instinct/experience ?

'....The market will supply the real answer…eg. Do you have a real edge ?'

Click to expand...

What is your edge?
A combination of technical indicator based patterns at pre-identified potential support/resistance/sbr/rbs areas - confirmed by individual price action.
Can you clearly define your edge ?
Yes: Certain repeatable patterns of oscillator divergence/extreme readings and band/channel deviation @ pre-identified potential support/resistance/sbr/rbs areas - confirmed by individual price action.
How did you find it ?
Trial and error & contniual observation of the live market and what indicators tell us about price.
Is it something you can teach someone else or is it based on instinct/experience ?
Yes but for real proficiency, like all trading edges it requires commitment and active engagement with the market over a sustained period, and even ahead of all that a user has to decide that it suits their own trading style/tolerances and preferences, and posess a real desire to trade, over other career choices.

'....The market will supply the real answer…eg. Do you have a real edge ?'
Undoubtedly true....Yes I believe I do, capable of indicating high probability trading set-ups in all market conditions,....that said a trading edge also requires the correct temperament and a mastery of the psychological factors that prevail in trading, and this can in my experience be more difficult than the 'trading edge' per say.

Yes, I have an edge.

It is my ability to control my emotions, not change them but to lock them away until it is safe to release them (safe being anytime outside of trading time). What I mean is when I am trading, I don't think about anything but trading which means my family and friends and anything else I love (or hate) are not on my mind, I am completely focused on the analysis of the markets. Even the thought of winning and losing does not enter my mind until the end of the day when I recap and enter my trades and decisions in my trading diary.
( I used to have written at the bottom of every page "Talk to Em'." my ex wife who hated trading, I guess I never made it easy for her when I told her "You should learn to love your losses."

Anyway.......this edge gives me amazing discipline in my trading and decision clarity.

Can it be taught? I'm not so sure, depends what your edge is. I never always knew what it was, it grew with experience and then continual nurturing when I realised how important it was to me. Now it's part of my trading toolbox (along with my other edges)

Mark.

The Philosopher said:

( I used to have written at the bottom of every page "Talk to Em'." my ex wife who hated trading,
Mark.

Click to expand...

Hi Mark

Good post.

Are there any wives who actually approve of trading I wonder?

I have an incredibly simple edge which took me several years to develop. It was staring me in the face but I only found it through visualisation of a concept I devised away from the charts.

I agree with Trader_Dante that the simpler things are, the better.

The reason being that if a monkey could trade your system then there is a chance that a person and his human emotions can.

Are there any wives who actually approve of trading I wonder?

Click to expand...

Yes. Their husbands don't.