With major banks spending hundreds of millions each year developing trading algorithms, what edge does the average punter have that will enable him or her to make money? It's a tough one. You could take the approach that there is money for everyone (with a consistent system), or maybe most day traders/private investors simply aren't going to make money, due to the experience of the competition.
Thoughts?
A trading edge is nothing more than more than an indication of a higher probability of one thing happening over another historically. Personally, I have a technical trading edge that when I employ in the correct overall price action conditions and at pre-identified potential supp/res/sbr/rbs produces a high strike rate of successful outcomes. This combined with the right money managemnet and of course the patience and discipline to await the trading edge in the correct circumstances enables me to take money from the market.
I agree with the above poster also that a great part of a successful edge is that we don't have to join the bid or offer until the edge sets-up.
I am always in mid of Mark Douglas's words in respect of trading an 'edge;'
The 5 Fundamental Truths of Trading:
1. Anything can happen.
2. You don’t need to know what is going to happen next to make money.
3. There is a random distribution between wins and losses for any given set of
variables that define an edge.
4. An edge is nothing more than an indication of a higher probability of one thing
happening over another.
5. Every moment in the market is unique.
The 7 Principles of Consistency:
1. I objectively identify my edges.
2. I predefine the risk of every trade.
3. I completely accept the risk or I am willing to let go of the trade.
4. I act on my edges without reservation or hesitation.
5. I pay myself as the market makes money available to me.
6. I continually monitor my susceptibility for making errors.
7. I understand the absolute necessity of these principles of consistent success
and, therefore, I never violate them.
