Having an edge.

[new_trader]

do you ever come out for air, or do you just like the smell?

UTB

AWWWWWW...poor the blades, didn't like me giving a Bad Rep for this post so he gives me one in return....awwwww...isn't that cute........awwww.....the blades....nya nya nya

 

[grantx]

Devilbis,

“We all agree that the mans posts are elegantly written”. I disagree.

“they are less than worthless.” I agree.

NT,

“it is a tacit understanding”. And non-seeing.

Amateurs vs physicists. unqualified vs qualified. Who is which, and what qualifications are we talking about in a trading context? Once again, obfuscation via analogy. May as well write in Sanskrit.

Grant.

 

[LondonUSTrader]

A premanent edge is the ability to recognise if and when an advantage is presented, and first of all to be able to recognise with unerring certainty the most likely order of magnitude of success in advance of a committment being made, or the contrary.

Then also at the same time an escape route is visualised in case the result delivered ultimately is the opposite of the one expected or even if it is not, but not up to expectations in volatile or unreliable scenarios.

And all of this in a flash, much more quickly in thought that can be expressed in words (because there is no time to dither or consult notes).

Additionally this ability contains within it several components that must be evenly balanced and harmonious to each other, briefly, firstly a deep resource of knowledge and expertise upon which to draw unerringly and immediately without hesitation or doubt.

Secondly a specifically developed and honed armoury of skill sets each developed and perfected to deal with separate scenarios.

Thirdly the ability to remain calm and impartial and devoid of all emotion whatsoever.

Fourthly the developed faculty to be able to futurologise.

Fifthly the ability to respond in a nanosecond if necessary by snap response to a given unexpected development if necessary.

Sixthly the maintenance and suspension of a supercooled mental state combining total alertness total relaxation and total imparitality and to be able to sustain this supercooled mental state indefinitely on command, at will, without effort for however long it is needed.

These six things have to be done at the same time, so we are talking of multitasking of the highest order.

A temporary edge is a minor version of the fully fledged and refined faculties described above and pertaining to anomalies or situations that are known not to be reliable in the sense they are not likely to persist for significant periods of time which present opportunities that are there for the taking, but only for the properly skilled.

I have to say much of the above is quite simply wrong regarding what an edge is.

An edge is simply that your trading method gives you a greater probability of making money rather than losing it if you follow your methods correctly over a set sample size of trades. An edge doesn't differentiate based on time frame or trading style (whether it day trading, swing trading, discretionary or mechanical). A permanent edge is simply an edge that lasts over time and as the name implies permanent. To give you an example, I used to trade a method that lasted and was profitable for 3 years then failed and never worked again. That was a temporary edge in my view. I know a trader who has traded the same edge over 10 years with only adjustments made for changes in volatility. I would regard that as a permanent edge (so far).

Responding in a nanosecond or not being able to dither to respond to notes only applies to daytraders. EOD traders have plenty of time to dither or consult notes. Does that mean they don't have an edge? Of course it doesn't. Much of what you have written are psychological attributes which I think are separate from an edge. When Rich Dennis handed his Turtles his edge and some didn't make money did that mean they didn't have an edge? I personally think having an edge and the ability to trade that edge are two different things.

 

[TheBramble]

I will try to describe it as best I can with an analogy.

There is a tendency to utilise analogies when plain speaking is all that is required.

There is no doubt that there are basics which need to be fully considered and inculcated before moving too far in Trading, or any other endeavour for that matter. These are rather easily acquired yet for some reason very seldom serve as the first port of call for many on their (rapid) path through trading.

There is clearly a need to understand the fundamentals of the markets and the participants (not fundamental analysis), how and why they interact the way they do. Many survive quite some time without getting to this stage. Some never do and manage to just about hang on, grimly.

There is a need to recognise there is no shortcut for experience and putting in the hours. Total commitment, passion, solid original research and concentrated study is required if success is to be at all possible over the long haul.

There are reams in print and on-line even regarding the more advanced aspects of trading and how to glimpse the intents of the various players at the various stages and cycles of the instruments we trade on a daily basis most of us, in the markets. Some manage to take all of this on board too. Quite an education. And usually, self taught. Motivation. It’s key.

This site has a membership which covers the complete newbie to the experienced and professional trader. It also possesses a wide spectrum of intelligence from the quite obviously totally stupid to quite obviously very intelligent.

At all times and with all of these categories in the ‘audience’ all that is required is plain speaking if you have a message and you really want to deliver that message. Communication is 100% the responsibility of the one doing the communicating. 100%. So if the message isn’t going home (or hasn’t gone home) the communicator needs to change what he or she is doing until they get a response that indicates success. Failure to do that is failure pure and simple.

The manner of speech and attitude play a large part in the success of any communication. While it’s not possible to adopt the most comfortable manner and mode to suit each and every person in such a potentially large audience as exists here, the best option is to go for that which is most direct, quite plain and simply straightforward. And to adopt the same platform as that occupied by those to whom one is communicating.

Allegories and analogies are useful as infrequent aids to getting the point home, not as a general mode of discourse when they become tedious and have quite the opposite effect.

If there are esoteric aspects of trading that one feels could be and should be communicated to a wider audience, it needs to be considered first why such aspects are esoteric in the first place. And it may likely be found that is because they are probably not capable of dissemination to a wide audience for a number of reasons.

But if they are communicable and if the person feels up to the job of communicating they then take the responsibility for getting the job done. Any failure in part or in full is their failure and in no part a failure on the part of the people being communicated to.

Recognition of this failure is best accepted on the first pass and as quickly as possible so that changes can be made to attempt a better target acquisition on the next ‘go’. And so until fatigue and pointlessness set in to the extent that no further effort is made and failure is gracefully accepted.

But to doggedly persist in the same manner and style of delivery with the same response and to insist it is your audience which is to blame is not only improper, it is a sad reflection on the character of the communicator themselves.

If the message has not come through it either means the communicator is not up to the job of delivering the message and/or there is no real message to be delivered.

To return to your analogy new_trader (which was a good one and extremely well put), any real Physicist worth his rock salt would respond to the searching questions from his tyro rocketeers with quiet, calm and benign compassion. He would lead them, thruough inductive reasoning, to help them focus on that which needs to be focused upon and when they struggle he would bring them gently back up with deductive reasoning to a level where they could once again understand completely and easily and comfortably begin their controlled descent once more down into the deeper understandings. Time and time again, until the job was done.

But true Physicists are few and far between. Even rarer among that breed are those that can communicate effectively with those outside their chosen sphere of excellence. And fewer still are those that have anything worth saying left to say.

And then there are those that pretend to be Physicists of a new Physics that only they know about....

 

[black bear]

Devilbis,

“We all agree that the mans posts are elegantly written”. I disagree.

“they are less than worthless.” I agree.

NT,

“it is a tacit understanding”. And non-seeing.

Amateurs vs physicists. unqualified vs qualified. Who is which, and what qualifications are we talking about in a trading context? Once again, obfuscation via analogy. May as well write in Sanskrit.

Grant.

At least we agree on something

sorry about the we, it was un-wise to be inclusive in my discription.

 

[grantx]

Searchlight,

Good post - something of value. This is against the spirit of the thread. I’m going to report you to the prefects.

Devilbis,

I think we agree on a lot of things. No apology necessary.

Grant.

 

[counter_violent]

AWWWWWW...poor the blades, didn't like me giving a Bad Rep for this post so he gives me one in return....awwwww...isn't that cute........awwww.....the blades....nya nya nya

Hey just so i'm in the spirit of things ...i'll give you some bad rep also ...that way, the other bad rep won't be lonely.

 

[black bear]

Searchlight,

Good post - something of value. This is against the spirit of the thread. I’m going to report you to the prefects.

Devilbis,

I think we agree on a lot of things. No apology necessary.

Grant.

Good trading Grant,
Nice to speak so to speak to someone from me own town

 

[zupcon]

Imagine a group of people wish to build and successfully launch a rocket into space. They don’t know anything about the laws of physics, or aerodynamics, or gravity or any other fundamentals of science required to achieve their aim, nor do they care to understand them, or perhaps they are unaware they even exist. All they care about is building and launching a rocket as quickly as possible. In other words, they are looking for shortcuts.
Snip....

Well you could have knocked me down with a feather, I never thought Id live to see the day where I agreed with anything new_trader had to say, but I thought this analogy was very good indeed.

 

[Profitaker]

A premanent edge is the ability to recognise if and when an advantage is presented, and first of all to be able to recognise with unerring certainty the most likely order of magnitude of success in advance of a committment being made, or the contrary.

No Socrates, that is a skill, which takes years of practice, trial and error, blood, sweat, and tears, to acquire. Just ask any professional footballer, or boxer, or successful trader. Since you're so fond of analogies I've one for you:- A croupier has no skill, but he has an edge. Do you see the difference ?

Regardless, can you illustrate for us by example, how each of these elements were utilised and played out in your recent options trade?

Thank you Bramble.

 

[nine]

To return to your analogy new_trader (which was a good one and extremely well put), any real Physicist worth his rock salt would respond to the searching questions from his tyro rocketeers with quiet, calm and benign compassion. He would lead them, thruough inductive reasoning, to help them focus on that which needs to be focused upon and when they struggle he would bring them gently back up with deductive reasoning to a level where they could once again understand completely and easily and comfortably begin their controlled descent once more down into the deeper understandings. Time and time again, until the job was done.

But true Physicists are few and far between. Even rarer among that breed are those that can communicate effectively with those outside their chosen sphere of excellence. And fewer still are those that have anything worth saying left to say.

And then there are those that pretend to be Physicists of a new Physics that only they know about....

LOL ... Very good

But how many real Physicists do you know? When I did my undergrad degree (physics) I knew some very good physicists and the best amongst them behaved more like Dr Gregory House than the gentle creature you have portrayed.

Great memories and thanks for the reminder.

 

[PKFFW]

PKFFW,

There is nothing left for me to say, other than to quote the signature Rols uses:

"For those who know, explanation is not necessary. For those who do not, none will suffice."

As for what I said about SOCRATES' ability to transmit understanding. I dare say that the recipient needs to be correctly tuned into the transmission because it is a tacit understanding.

In return there is nothing left for me to say, other than to quote the old and wise saying:

"There is no such thing as a bad student, only a bad teacher."

Cheers,
PKFFW
P.S: Still couldn't find any contradictions of mine hey?

 

[grantx]

Devilbis,

That’s a coincidence. What part of Monte Carlo do you live?

Good trading to you, mate.

Nine,

One of my ancestors was a physicist, a fellow of the Royal Society, and received a knighthood (honest). I’m none of these.

Who is Dr Gregory House?

I remember a tv programme years ago where a well-known, aged (but brilliant in my eyes), physicist demonstrated a point (can’t remember what ) rejected by contemporaries.

The demonstration consisted of spinning at very high speed a heavy steel wheel (around 24-36 inches/600-900 mm in diameter) on a steel axle, the thickness and length of one’s arm. It was far too heavy to lift in it’s dead state, so to speak.

Once the required speed was achieved, he was able to lift the whole thing with one hand, and with little effort. His first name was Eric (can’t remember his Surname – it will come to me).

Now the emphasis seems to be on some blonde-haired bint from Oxford (OK, she’s a neuro scientist (?), rather than a physicist) to try to make science more sexy. Dumbing-down.

Grant.

 

[nine]

grant,

If you've missed house you've missed a chance to give your sense of humour a workout. It may depend on what you enjoy. Imagine a physics prof like this and you'll know what I experienced.

http://www.usanetwork.com/series/house/index.html

 

[PKFFW]

I will try to describe it as best I can with an analogy. Don’t try and pick the analogy to pieces, instead try and understand the bigger picture because it is an abstract concept.

If the analogy is flawed I will pick it apart as the flaw in the analogy translate to a flaw in your own understanding. If your own understading is flawed how can you possibly expect to transmit proper understanding to others?

Imagine a group of people wish to build and successfully launch a rocket into space. They don’t know anything about the laws of physics, or aerodynamics, or gravity or any other fundamentals of science required to achieve their aim, nor do they care to understand them, or perhaps they are unaware they even exist. All they care about is building and launching a rocket as quickly as possible. In other words, they are looking for shortcuts. Through trial and error they discover that certain rocket designs work better than others and so they believe it’s only a matter of time before they discover the ‘perfect’ design which will give them the edge they are searching for. They even manage to convince each other that the perfect rocket design is attainable and it is only a case of working together and co-operating and the design will materialise. During this process, a Physicist observing all this going on tries to help them discover what they need to know before they have a hope of building rockets. They scorn this physicist and regard his input as unnecessary ‘mystical’ nonsense. Grava-what? Aerody-what? Escape ve-what? What is this gibberish they say? Eventually the ‘herd’ may come up with a rocket design that works and they will think that they have an edge that is permanent. Why wouldn’t they? Each rocket launches successfully and even manages to orbit the earth, just the way they want. But it isn’t really a permanent edge because the rocket design will only work on earth. Now remember this is an abstract concept, so being limited to earth is irrelevant. The true physicist, with a permanent edge knows that in order to build a rocket that will work on earth or in fact any planet in the universe, they must understand the laws of physics. The laws of physics are universal and do not change, ever. This is a permanent edge. Do you understand? Building a rocket that works on earth and only on earth is a temporary or minor edge. Understanding the laws of physics is a permanent or major edge. OK? This is why NASA can successfully land a sojourner on MARS, a planet they have never set foot on, using earth bound physics. Now, two different Physicists may come up with different rocket designs, as the Americans and Russians have, but they could trace the design concepts back to the same understanding of physics. This is also why two different physicists, who have never met can understand and communicate concepts that escapes the average herd member looking for shortcuts.

I have highlighted where the flaw in your analogy occurs.

You may or may not be correct in your statement about the laws of physics being constant and never changing. There is some debate about that.

However your implication that the physicist has a permanent edge by understanding the laws of physics is most definitely incorrect. Human understanding of the laws of physics is ever evolving. What we once thought we "knew" has since been proven incorrect. What was once thought impossible is now known to be possible.

The same goes for trading. Anyone who thinks they know it all is kidding themselves and allowing their ego to influence their judgement. Of course they may indeed be much better at trading than another. That is far different from being infallible and having complete and totally correct understanding though.

Further to that your analogy states the "herd" wants to "build a rocket and successfully launch it into space". Your analogy further states that they do eventually succeed in that goal. Each time the rocket successfully launches. You then try to imply that because it can only do so from Earth then this is not good enough. Their rocket can't work on Mars therefore it is implied that the rocket is flawed or not a rocket at all.

In short though, the rocket achieves the goal that the "herd" was striving for. Obviously it hasn't achieved a goal your physicist believes to be commensurate with rocket science. You know what though? I'm betting the "herd" doesn't give two tosses about your physicists ideas because they have successfully achieved their goal. No one asked for your physicists tick of approval on the project. No one cares if your physicist could build a better rocket. The fact your physicist can build a better rocket that could take off from Mars in no way means that the rocket built by the "herd" does not adequately achieve the goal set by the "herd". Do you comprehend that fact?

In the end though, you started this thread about having an edge. As I mentioned to Socrates, this thread was not started as a discussion about being a master. Not about understanding everything. Not about using allegories and analogies to imply one has the secret to the trading universe. It is about having an edge. You and Socrates for some reason have seen fit to mould and shape the thread into something it was not when originally started. Why?

Cheers,
PKFFW

 

[grantx]

Nine,

This is an American tv programme – I don’t watch fxxxxxxx US tv progs (except South Park). What’s worse, an English actor with an terrible accent in a medical context – over-acted, over-written, over-the-top, over my fxxxxxxx dead body.

I still can’t remember that physicist’s name. It will come to me. At the risk of showing my ignorance, here’s one from quantum physics: how can something be and not be simultaneously?

PKFFW,

Well argued, Sir.

Grant.

 

[Charlton]

Nine,

This is an American tv programme – I don’t watch fxxxxxxx US tv progs (except South Park). What’s worse, an English actor with an terrible accent in a medical context – over-acted, over-written, over-the-top, over my fxxxxxxx dead body.

I still can’t remember that physicist’s name. It will come to me. At the risk of showing my ignorance, here’s one from quantum physics: how can something be and not be simultaneously?

PKFFW,

Well argued, Sir.

Grant.

Perhaps this will jog your memory. He invented the linear motor, a brilliant concept, but it never really seemed to get off the ground.

http://www.alternativescience.com/eric-laithwaite.htm

Charlton

 

[black bear]

Devilbis,

That’s a coincidence. What part of Monte Carlo do you live?

Good trading to you, mate.

Hi,

To wet for me up there had to move to the English Riviera

other Riviera to rich, Ill have to get a better EDGE

good trading to y to grantx

 

[new_trader]

You may or may not be correct in your statement about the laws of physics being constant and never changing. There is some debate about that.

There wasn't a doubt in my mind that you would turn this into a discussion about physics. Whether there is debate about the annotation of these laws there is one thing that I am as good as 100% certain on. The moon will still be orbiting the earth next week, just like it did last week, just like it has done for the last 4 billion years or so and is likely to continue to do for the next few billion years. I can't imagine (although no doubt you can) the moon deciding overnight to disobey these laws and drift off into space.

However your implication that the physicist has a permanent edge by understanding the laws of physics is most definitely incorrect. Human understanding of the laws of physics is ever evolving. What we once thought we "knew" has since been proven incorrect. What was once thought impossible is now known to be possible.

It's more about understanding that there are laws which govern the way matter and energy behaves in the Universe and the ability to use this understanding through observation and experiment to produce something useful.

In short though, the rocket achieves the goal that the "herd" was striving for. Obviously it hasn't achieved a goal your physicist believes to be commensurate with rocket science. You know what though? I'm betting the "herd" doesn't give two tosses about your physicists ideas because they have successfully achieved their goal. No one asked for your physicists tick of approval on the project. No one cares if your physicist could build a better rocket. The fact your physicist can build a better rocket that could take off from Mars in no way means that the rocket built by the "herd" does not adequately achieve the goal set by the "herd". Do you comprehend that fact?

I know that the 'herd' doesn't give a toss or two. This the difference between a civilisation that are content to be stuck forever in one place without progress and destined to become extinct and a civilisation that wishes to expand and be truly space faring.

In the end though, you started this thread about having an edge. As I mentioned to Socrates, this thread was not started as a discussion about being a master. Not about understanding everything. Not about using allegories and analogies to imply one has the secret to the trading universe. It is about having an edge. You and Socrates for some reason have seen fit to mould and shape the thread into something it was not when originally started. Why?

You must be kidding? This thread has been sidetracked despite my initial efforts to keep it on track. I am happy to keep it running along its original course. So, why would someone share an edge simply because someone asks for it? It would be preferable if you kept your answer to 25 words or less.

 

[Profitaker]

So, why would someone share an edge simply because someone asks for it? It would be preferable if you kept your answer to 25 words or less.

Allow me......they wouldn't.