The Secret Edge

[DionysusToast]

Simple as the above, and in particular the highlighted bits.........no need to be disappearing up ones own **** with this thread....

I put you down for option 3 then

 

[LiamH]

I agree with Parawnsandwich...

To have an edge simply means that your strategy wins more than it loses.. This is a mathematical edge over the market.

People may well keep their strategies secret so I suppose there are secret edges in one sense but meh, you're either profitable or you're not. If you are then you have an edge and if you're not you don't.

Oh, and I picked option 2 because at least for the time being I'm showing a profit.

 

[DionysusToast]

Mathematical ?

What does mathematics have to do with being a succesful trader ?

 

[redart]

option3

 

[HowardCohodas]

Mathematical ?

What does mathematics have to do with being a succesful trader ?

Or a successful poster, I guess.

On the slight chance, given the source, this was a serious question, try reading anything by Edward O. Thorp. He has made quite a record in successful trading using his mathematical skills.

And then, of course, there is the Gambler's Ruin Theorem, that informs us in money management, which we all know is on of the keys to successful trading.

 

[Black Swan]

As one of the other members says in their signature. Trading is war.
.

No it fookin isn't, which prize tw@t has that in their sig? The ultimate skill in battle is the ability to win without actually having to fight..

 

[MrGecko]

My edge is that I stopped trading when I was losing more than I thought I should.

 

[LiamH]

Mathematical ?

What does mathematics have to do with being a succesful trader ?

I'm not as articulate as some of you.. maybe mathematical is the wrong word..

You make 10 trades with a 1:1 R:R - 6 profitable = 60% winners. Every 10 trades you make 2x R... this is your edge. Obviously these figures can be whatever you want and there are only two outcomes. You're either profitable or you're not (you either have an edge or you don't).

 

[HowardCohodas]

I'm not as articulate as some of you.. maybe mathematical is the wrong word..

You make 10 trades with a 1:1 R:R - 6 profitable = 60% winners. Every 10 trades you make 2x R... this is your edge. Obviously these figures can be whatever you want and there are only two outcomes. You're either profitable or you're not (you either have an edge or you don't).

Don't be cowed by some of the responses to your posts. You were spot on. "Mathematical Expectation," is a well understood concept in trading. It is computable and is a good basis for judging if you have an edge. There are other criteria as well, such as maximum draw down, maximum consecutive losses, etc. However Mathematical Expectation is the first principle.

Live Long And Prosper.

 

[Shakone]

What is in it for the one who reveals their edge or part of their edge? I think nothing. So if it is nothing, then why give away all that hard work over years to a bunch of strangers? Therefore it remains secret, not because it would stop working by others knowing it, but it is your property and your work, and you don't give either away unless it is charity.

 

[HowardCohodas]

What is in it for the one who reveals their edge or part of their edge? I think nothing. So if it is nothing, then why give away all that hard work over years to a bunch of strangers? Therefore it remains secret, not because it would stop working by others knowing it, but it is your property and your work, and you don't give either away unless it is charity.

There are other motives for teaching a strategy than you mention. Love of teaching. Psychic rewards for sharing good fortune. And last, but not least, you learn more about a subject by teaching it than you did by learning it or developing it. When teaching, nothing is taken for granted by your students. It is a humbling, but worth while process.

 

[Shakone]

True Howard, but you can teach without revealing a solution. In fact the best teaching is done by guiding the student towards finding their own solution.

 

[herr]

There is a secret edge, a holy grail.

No doubts about that. I am the stupid that I didn't find it. This is a game between stupids and intelligents, and I was always in the side of the stupids.

 

[Prawnsandwich]

Regarding the view that a particular edge can dissapear the more people know and use it, I'm not so sure that this stands up to scrutiny.....

The more market participants acting on a particular set up when they see it the better, (for those trading that set-up) surely ?

 

[Shakone]

Regarding the view that a particular edge can dissapear the more people know and use it, I'm not so sure that this stands up to scrutiny.....

The more market participants acting on a particular set up when they see it the better, (for those trading that set-up) surely ?

Not if you couldn't get filled because of it. but in general, yeah I agree.

 

[meanreversion]

Regarding the view that a particular edge can dissapear the more people know and use it, I'm not so sure that this stands up to scrutiny.....

The more market participants acting on a particular set up when they see it the better, (for those trading that set-up) surely ?

Precisely. Surely if you were a trend follower you would want everyone else jumping on the trend as well..

There is the notion that if people know your edge they will try to move the market to screw you over, but let's be honest, at our level that simply isn't going to happen.

As far as this notion of risk:reward is concerned.. you get to quantify the risk, but the market decides your reward. As I've always said, it's about how much you're prepared to lose, not how much you want to make.

 

[HowardCohodas]

True Howard, but you can teach without revealing a solution. In fact the best teaching is done by guiding the student towards finding their own solution.

We are in violent agreement.

My trading methods, which I have disclosed in posts on the forum, still require the trader to make decisions based on his personality and level of risk tolerance. I have my own, but I don't reveal them. Not because they are secret. But because the trader must be taught to think about such things when he starts and again after he develops a comfort level with trading.

Given all this, there are some who feel more comfortable having someone to work with for a while after the have had their education and training. We know this as mentoring or coaching. As I work on developing my teaching business, I initially did not have the coaching part. My my "beta-test" students convinced me I was shortsighted.

 

[meanreversion]

My trading methods, which I have disclosed in posts on the forum, still require the trader to make decisions based on his personality and level of risk tolerance. I have my own, but I don't reveal them. Not because they are secret. But because the trader must be taught to think about such things when he starts and again after he develops a comfort level with trading.

I'm still struggling with the notion that someone who has only traded for a year is teaching other people to trade. You can do as much research as you like, but there is no substitute for experience, i.e. actually trading.

After all, do YOU actually know the best style of trading to suit YOU?

 

[HowardCohodas]

I'm still struggling with the notion that someone who has only traded for a year is teaching other people to trade. You can do as much research as you like, but there is no substitute for experience, i.e. actually trading.

After all, do YOU actually know the best style of trading to suit YOU?

After 40 years of investing and 7 years of on and off being a consultant to traders and 1 year developing the system I currently use and over 3 months of trading it in a separate auditable account and profits meeting the expectations that my 4 step qualification process, which included 5 years with backtest date, projected, I have developed a certain level of confidence beyond my ego.

Some of those whom I have taught this including my son (mathematician and economist) are now successful with it as well and recommended I proceed with my idea of teaching it in a more formal fashion.

I know of no other metrics I could apply to evaluate my level of knowing what is the best style for me.

We all have our own personal level of risk tolerance. Yours is likely different than mine.

 

[JRP2891]

Given all this, there are some who feel more comfortable having someone to work with for a while after the have had their education and training. We know this as mentoring or coaching. As I work on developing my teaching business, I initially did not have the coaching part. My my "beta-test" students convinced me I was shortsighted.

Mentor/trainer after a year's live trading...i've heard it all now.