Do you have an "Edge"

[ffsear]

Time and time again I hear people talking about “having an edge” in the market and “If you don’t know what your edge is, you will fail”



But can you really have an edge in financial markets? I can think of two possible situations where one may have an edge..



1) Black box trading (High volume and being a few milliseconds ahead of the market)

2) Trading on inside information.



Other then these two points, I can’t really see where someone can claim to have an edge in the market. All we can do is be sensible, analyse, manage risk, and stick to our rules.



Any thoughts?

 

[Bloodhound]

All we can do is be sensible, analyse, manage risk, and stick to our rules.

Surely that in itself is an 'edge'?

 

[ffsear]

Perhaps, but its not really a mathmatical edge when the majority of the market are doing the same.

 

[neil]

No substitute for hard work and study

Surely that in itself is an 'edge'?

Agreed.
Are not support and resistance, risk return ratio etc..etc..mathamatical edges.
Then you add discipline.
If you know of a free black box or insider info please share with us

 

[Martinghoul]

Perhaps, but its not really a mathmatical edge when the majority of the market are doing the same.

It is, if you assume (not unreasonably) that the majority of the mkt overreacts/underreacts on different horizons. Moreover, if you assume the existence of other behavioural biases, it makes even more sense.

Finally, if you also assume that liquidity is not infinite, all sorts of interesting definitions of edge can be designed.

 

[arabianights]

my edge is front running martin's trades

 

[oiltanker]

i'm often edgy. does that count?

 

[oiltanker]

actually people make a nice living from mistakes.

one might say between chelsea, man utd, aresenal and liverpool how can there really be an edge? but someone wins and usually you might hear the manager say at the end 'the mistake cost us' or something on those lines.

there's enough money in the mistakes?

 

[Bloodhound]

Perhaps, but its not really a mathmatical edge when the majority of the market are doing the same.

But that makes the assumption that mathematics are relevant to financial markets. What if the markets are actually chaotic?

 

[oildaytrader]

My edge is timing entries and my second edge is a propreitary progressive betting system for traders,where i always win after many losses.The progressive betting system scales in and scales out,after a losing streak.

Don't start this martingale stuff ,because I DO NOT USE IT.

 

[Black Swan]

hmmm....could be a good thread this.. OK, how I view my edge; if a certain confluence of indications exists on my charts then I take a trade, I am close on 100% consitent with my own rules in terms of entry, exit and the management/discipline of the trade when 'in it'. My edge is 100% probability based - if abc/xyz occurs (on charts) then (previous) probability suggests the trade will go in my favour...er...that's it...simples

 

[HawkTrader]

My edge? Making money of course!

 

[ha0dho]

OK, how I view my edge; if a certain confluence of indications exists on my charts then I take a trade, I am close on 100% consitent with my own rules in terms of entry, exit and the management/discipline of the trade when 'in it'. My edge is 100% probability based - if abc/xyz occurs (on charts) then (previous) probability suggests the trade will go in my favour...er...that's it...simples

Thats what i would call an edge, following ur plan to the letter is an edge.

 

[ffsear]

But that makes the assumption that mathematics are relevant to financial markets. What if the markets are actually chaotic?

its made on the assumption that mathematics are relevant in predicting the true value of a share/option etc etc.

 

[zupcon]

But that makes the assumption that mathematics are relevant to financial markets. What if the markets are actually chaotic?

Regardless of anyone's personal belief that the market is random, ordered or chaotic, they either have a positive mathematical expectancy, or they dont.

Anyone without a mathematical edge either has an equity curve with a negative gradient, or they're living on borrowed time.

 

[Rossini]

Thats what i would call an edge, following ur plan to the letter is an edge.

Following your plan to the letter can not be an edge, because what if your plan is no good? You will still lose money. Therefore it's logical to assume that your edge must be your plan.

Edit. However its no good having an edge and not following it to the letter.

 

[trendie]

the question of edge is one that causes me constant disquiet. moreso after a sequence of losses.

I know I know nothing about the markets, and cant influence them.
I know there are better qualified, more knowledgeable, and better capitalised players out there.

However, my edge, (such as it is), is to let the big boys push the market in whatever direction they choose. My job is not to stand in their way, and try to sneak on board once it becomes obvious.

I know I will always get in late. I know I will always get out late.

EDIT: my job is not to outsmart the market. my job is to follow the players smarter than me.

 

[Bloodhound]

I don't know about the statement re not knowing what one's edge is will lead to failure, but I would have thought that knowing what one's edge is is an edge in itself?

 

[Paul71]

Time and time again I hear people talking about “having an edge” in the market and “If you don’t know what your edge is, you will fail”



But can you really have an edge in financial markets? I can think of two possible situations where one may have an edge..



1) Black box trading (High volume and being a few milliseconds ahead of the market)

2) Trading on inside information.



Other then these two points, I can’t really see where someone can claim to have an edge in the market. All we can do is be sensible, analyse, manage risk, and stick to our rules.



Any thoughts?

How can two retailers look at the same market, in the same time-frame, and come to opposing conclusions?

Don't forget, retailers are not moving the market, they only have to join.

Logically speaking (whatever that means in the world of retail trading) shouldn't retailers be getting it more right than wrong?

Any thoughts?

 

[oildaytrader]

My edge is timing entries and my second edge is a propreitary progressive betting system for traders,where i always win after many losses.The progressive betting system scales in and scales out,after a losing streak.

Don't start this martingale stuff ,because I DO NOT USE IT.

I want to list all my edge.

I use robots which never get tired,don't sleep , don't doze off or go to loo before the important trade,they monitor the markets every millisecond for price changes ,trading multiple systems (as many as 30 systems) simultaneously on same instrument,and trade multiple instruments, follows every game plan precisely, doesn't deviate from rules,uses progressive betting methods ,times the entries perfectly,has no emotional trading,has no biases which humans have,uses sound money management with positive expectancy.

So its not just one edge but many different factors that give the final edge