The "edge"?

E

Excelentj

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Hi team,

I've been trading now for 3 weeks on IGINDEX and it's going pretty bad (lol). I've lost £150 in these three weeks. Probably going to take a while before I start making constant profit so I dont think £150 in 3 weeks is too bad. The problem is that right now it just feels like gambling to me... everywhere I look it says I need a solid strategy that I stick to. I'm having trouble finalizing this strategy simply because my entry points just seem like speculation i.e the trade always goes against me straight away. Can anyone help me with this?

Secondly- I'm not sure what the "Edge" is? It sounds pretty important...

thanks,

J
 
Excelentj said:
Hi team,

I've been trading now for 3 weeks on IGINDEX and it's going pretty bad (lol). I've lost £150 in these three weeks. Probably going to take a while before I start making constant profit so I dont think £150 in 3 weeks is too bad. The problem is that right now it just feels like gambling to me... everywhere I look it says I need a solid strategy that I stick to. I'm having trouble finalizing this strategy simply because my entry points just seem like speculation i.e the trade always goes against me straight away. Can anyone help me with this?

Secondly- I'm not sure what the "Edge" is? It sounds pretty important...

thanks,

J
Click to expand...

An edge by simple definition is an advantage.

The market very often is chaotic but there are windows when it presents an advantage or edge to those participants that recognise the opportunities. This premise requires the market participant to recognise it when it presents itself; is able to execute the appropriate strategies to participate in it; and have the capability to exploit it effectively. The latter is the trader's edge. In essence, the appropriate strategy requires the combination of these two "edges".

The starting point of your strategy is therefore dependent on knowing when and how the market presents the appropriate opportunity. If you don't, trading is more akin to gambling.
 
Evening Excelentj

There is gambling, there is speculation, and there is trading. Trading is knowing what you are doing.

To get straight to the root of it you really need to think about things in a different way to usual, which is not easy because the ego, the captain of your ship, takes some persuading.

Financial markets do not create economies, economies create financial markets. And economies are created through the cooperation of mass populations. Without mass populations there would be no financial markets. Financial markets can be thought of as superchargers of economies, with the physical output of the mass populations being the engine. When used properly, the financial markets can bring great efficiencies to economies, increasing output manifold for every unit of energy inputted.

Now, human output is facilitated by many environmental factors, and these factors exhibit multi-layered seasonal patterns. Accordingly, human output will move with these natural patterns, and so the financial markets will also echo these natural patterns.

The ego does not like this kind of logic because it has been taught that it has to be in absolute control, without realising that it is through harmonising with these natural movements that the 'holy grail' is found. Instead, the words 'random' and 'volatile' fly about, because the ego has to rationalise its actions in some way, believing that it is separate to natural movement.

In combining the Elliott Wave Theory with Hurst's Cyclical Analysis, this will give you a fair character model of the natural movement mentioned above.

First then, it is a good idea to repetitively practice process - think Karate Kid. Initially, the practicing will seem pointless and laborious, especially when applying small stakes. But once this becomes second nature, you will see the results flow, the reasons for which by that time you will fully know.

In practicing process you need to focus on a few simple methods, there's no need to overcomplicate things. Start with a standard indicator and stop loss method. Be in the same market as much as you can without chopping and changing. The indetrader website contains a possible learning framework which may be of use.

Hope this helps.

PS Please excuse any typos - it's a tad late and not proof read.
 
Hi Excelentj,
Welcome to T2W.

Along with the link provided by Shakone, check out the first two links in my signature, below. Once you've read them, come back with any further questions you may have. One other thing, if you're trading a live account with IG - stop now! You're nowhere near ready to use real money. By all means continue trading, but do so on a demo account trading paper money. No shame in that, I and many other long standing members have demo accounts and regularly use them for trying out new ideas or different markets etc.
Tim.
 
I'm still trying to figure out what the U2 guitarist has to do with any of this?
 
Excelentj said:
Hi team,

I've been trading now for 3 weeks on IGINDEX and it's going pretty bad (lol). I've lost £150 in these three weeks. Probably going to take a while before I start making constant profit so I dont think £150 in 3 weeks is too bad. The problem is that right now it just feels like gambling to me... everywhere I look it says I need a solid strategy that I stick to. I'm having trouble finalizing this strategy simply because my entry points just seem like speculation i.e the trade always goes against me straight away. Can anyone help me with this?

Secondly- I'm not sure what the "Edge" is? It sounds pretty important...

thanks,

J
Click to expand...

An edge is anything that allows you to judge an entry, or to avoid an entry, or to exit, at a perceived advantage, over and above any random or arbitrary entry or exit.
 
ID have said an edge is any method that theoretically and logically has the capacity to generate a return given prevailing market conditions and trends.
 
hey dude

"an Edge" in its meaning as applied to Trading is defined in dictionary as :-

a favorable margin : advantage <has an edge on the competition>

so the edge is what makes you money in a market during the good times, and prevents you losing money in the bad times

so find it and sharpen it .....
N
 
NVP said:
hey dude

"an Edge" in its meaning as applied to Trading is defined in dictionary as :-

a favorable margin : advantage <has an edge on the competition>

so the edge is what makes you money in a market during the good times, and prevents you losing money in the bad times

so find it and sharpen it .....
N
Click to expand...

I'll second that motion.

Start simple, make it your minimum standard, and keep looking for ways to split the arrow, that is, surpass yourself.

Remember Excelentj, it's not an edge over other traders, there's plenty to go around, it's an edge or further insight into market movement, although try to see the market as your friend rather than competition.
 
new_trader said:
An 'edge' means having an IQ in the top 2% of the population.....
Click to expand...

An interesting perspective and probably and more likely, corresponds to those who do succeed in trading.....BUT am sure some would agree that this is not a requirement.

Trading is simply buying and selling:
Buy low and sell high.....or.....buy higher and sell higher and
sell high and buy low.....or sell lower and buy lower.

Yet it is SO difficult to DO!.....WHY?
 
Triggerfish said:
An interesting perspective and probably and more likely, corresponds to those who do succeed in trading.....BUT am sure some would agree that this is not a requirement.

Trading is simply buying and selling:
Buy low and sell high.....or.....buy higher and sell higher and
sell high and buy low.....or sell lower and buy lower.

Yet it is SO difficult to DO!.....WHY?
Click to expand...

because
when you buy low you dont know if its going to go lower
when you sell high, you dont know if its going to go higher

when you buy higher you dont know if its going to fall
when you sell lower you dont know if its going to start rising

the key to picking the right trading option is determing whether you are in a range or a trend.
then, of course there is the transition from a period of ranging to a trend.
or the transition period of a trend to a range.

once you know if you're in a trend or a range, you can deploy the appropriate indicators.

fascinating as a game of Go. simple rules, almost infinite variations.
 
Triggerfish said:
An interesting perspective and probably and more likely, corresponds to those who do succeed in trading.....BUT am sure some would agree that this is not a requirement.

Trading is simply buying and selling:
Buy low and sell high.....or.....buy higher and sell higher and
sell high and buy low.....or sell lower and buy lower.

Yet it is SO difficult to DO!.....WHY?
Click to expand...

-Costs

-The fact that they don't really know what they are currently looking at

-The fact that they don't really know what they'll do when what happens next doesn't conform to the ideal

-Emotional issues.
 
Excelentj said:
Hi team,

I've been trading now for 3 weeks on IGINDEX and it's going pretty bad (lol). I've lost £150 in these three weeks. Probably going to take a while before I start making constant profit so I dont think £150 in 3 weeks is too bad. The problem is that right now it just feels like gambling to me... everywhere I look it says I need a solid strategy that I stick to. I'm having trouble finalizing this strategy simply because my entry points just seem like speculation i.e the trade always goes against me straight away. Can anyone help me with this?

Secondly- I'm not sure what the "Edge" is? It sounds pretty important...

thanks,

J
Click to expand...


If you break a futures market down into its component participants, where would a possible retail level advantage become apparent, if you held the belief of AMT?
 
"The Edge"

We all have our own version of what is the"edge" in the market. I keep my trading style KISS, I always trade in the direction of the trend and momentum, as plain and simple as that. No trying to guess tops and bottoms, Historical S&R levels etc. Every entry is a mirror image of the previous trades, enabling me to achieve consistency in execution of entry and exit. Why make it more complicated than needed. The traders worse enemy is themself.
 
Last edited:
All,

Thanks for your thoughtful replies. I am currently spending most of my time researching methods and strategies and testing them out. So far I am getting comfortable using the MACD and Bollinger Band... the pros are probably chuckling at the thought but I will soon find out how good it is. As far as having an edge I am only trading with a 3:1 ReRi ratio and I'm moving my stop to break even only after a snapback. I move my stop up to the highest profit when the Bollinger band is breached and exit the trade when the MACD line crosses the Signal line.

thanks
J
 
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