What is your Edge ?

stumper

Active Member
#1
Hello Traders,

Is it possible for the successful traders on this forum to give some insights on the Edge they have had in their trading strategy?

I was surprised, when a couple of online debates turned heated with friends claiming "This EDGE thing" is very subjective. I believe its not.

For me, a Edge can be anything...A Edge that allows your strategy to give positive returns over long/short period...Reading DOM, Inter Market co relationship, Political news, Economic Statements, etc. Anything that has given you a Edge.

I have struggled in this aspect and was curious to know how others have fared.

Regards.
 

DSM

Well-Known Member
#2
Good question. Edge can be different things to different people. For me it will be the confidence and ability to trade the setup without any doubt, as my understanding of the trade is clear in terms of probability and RR.

This edge can be explained as the difference between an experienced driver who can drive his car WITHOUT thinking (unconscious competence) as against in the learning phase of a driver who thinks and drives (conscious competence)

Hello Traders,

Is it possible for the successful traders on this forum to give some insights on the Edge they have had in their trading strategy?

I was surprised, when a couple of online debates turned heated with friends claiming "This EDGE thing" is very subjective. I believe its not.

For me, a Edge can be anything...A Edge that allows your strategy to give positive returns over long/short period...Reading DOM, Inter Market co relationship, Political news, Economic Statements, etc. Anything that has given you a Edge.

I have struggled in this aspect and was curious to know how others have fared.

Regards.
 

jamit_05

Well-Known Member
#3
Edge can be different things to different people. For me it will be the confidence and ability to trade the setup without any doubt, as my understanding of the trade is clear in terms of probability and RR.
The above is the absolute basic requirement to succeed as a trader; a mental state. Without it system wouldn't matter.

Edge is the precise reason why the final result of a set of trades will be positive. Edge is the reason why your system has positive expectancy.
 

stumper

Active Member
#4
The above is the absolute basic requirement to succeed as a trader; a mental state. Without it system wouldn't matter.

Edge is the precise reason why the final result of a set of trades will be positive. Edge is the reason why your system has positive expectancy.
I agree. A Edge cant be subjective. Would you say TA by virtue of its subjective nature , gives any more edge to a trader?

I had encountered a day trader at my local broker's terminal pit.. This mate really had a knack for trading based on DOM. Would be staring endlessly at the price ticker .... and would kick in all of a sudden with a buy/sell order. I would guess (not sure) that he had got hold of the speed of the ticker .

Sadly, he faded out ... could not bring himself to idea of a stop loss
 

jamit_05

Well-Known Member
#5
I agree. A Edge cant be subjective. Would you say TA by virtue of its subjective nature , gives any more edge to a trader?

I had encountered a day trader at my local broker's terminal pit.. This mate really had a knack for trading based on DOM. Would be staring endlessly at the price ticker .... and would kick in all of a sudden with a buy/sell order. I would guess (not sure) that he had got hold of the speed of the ticker .

Sadly, he faded out ... could not bring himself to idea of a stop loss

The setup identification must be subjective. Like spotting of pivots and triangles etc. That is the correct edge.
 
#6
My edge is as under :

1) I have a very competent system with positive expectancy. It has over 60 -65 % success rate and over 2:1 Reward/Risk ratio.

2) I have confidence to trade this system with very small stops.I can make necessary changes in the system if market environment changes.

3) I have confidence that I can make money every day in any market....and discipline to take trades on this system without second guessing them.

4) I am strong on capitalisation. So a string of losses does not make a big dent in my capital.


Smart_trade
 
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#8
You must have your own self-discovered edge to trade in the markets...... No matter the day or time you should always be aware of your edge, which is composed of specific skills, resources, and talents that are unique to yourself. Casinos, for example, use the vig and weighted odds to improve the number times they win........... That is their edge, and although the new trader cannot mimic the edge of the casino, I know of several tips and tricks that have helped me find my edge........... Forget any technical indicator that does not give reliable signals and seem more like astrology. Those indicators can be very subjective. I want technical indications that are as simple as possible. Support, resistance, volume, trend many of my best signals come from watching these basic four very closely.............:thumb::thumb::thumb:
 

stumper

Active Member
#10
My edge is as under :

1) I have a very competent system with positive expectancy. It has over 60 -65 % success rate and over 2:1 Reward/Risk ratio.

2) I have confidence to trade this system with very small stops.I can make necessary changes in the system if market environment changes.

3) I have confidence that I can make money every day in any market....and discipline to take trades on this system without second guessing them.

4) I am strong on capitalisation. So a string of losses does not make a big dent in my capital.


Smart_trade
Thank you for the insightful comments.

But my confusion (and reason for the post) starts with the premise --- What actually is a Edge? .... A Edge leads to positive expectancy and can not be subjective. Confidence and competent system are by-products of a Edge you carry and not the other way around.... would you agree? .... What Edge do you have that gives your system a healthy expectancy (You already listed a good one ... properly capitalized).

Let me further elaborate. I used to be a decently successful trader (A Small time trader though ... different story about why i got frustrated with the Indian markets). I used to trade only two instruments -- SBIN and LT. Only two. The edge (perceived) i carried was subconscious knowing of price action for of this two instruments (specially knowing when it has hit its top ). Obviously window of opportunity were few (ie; I was competent only in shorting of this two instruments) but had a hit rate touching approx 70% (Active trading Period of approx 14 months). This was very subjective as i could not explain what i saw that made me click the sell button. I burned out since this was no strategy to start with. Looses were wide as i had to rely on S/R levels for stop-loss points.

Coming back to the point ... i perceived my Edge as being "very intimate with the price action of this two instrument". Why only sell -- I don't know. Why not other like Nifty Fut's -- I tried but failed miserably.

Hence was curious on peoples perception on Edge they carry. Is your edge subjective (like my perceived Edge) ?
 

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