What is an edge?

[FXSCALPER2]

[QUOTE=wasp;430005]So when you press buy or sell, do you not think you have more than 50% chance of success?

Yes, I do of course, but it will be nonesensical to say that is an edge. This is true even if you ask me why and I explain the 'reason' for the trade. You can't say, 'hey that makes sense, let me do it' and expect to replicate the results.

 

[new_trader]

[Btw, kenobi, do you also think for your own, or do you just use strategically placed reps?]

FW,

This is a bit hypocritical coming after your speech about advisors. It wasn’t a problem until reps were visible.

 

[firewalker99]

[QUOTE=wasp;430005]So when you press buy or sell, do you not think you have more than 50% chance of success?

Yes, I do of course, but it will be nonesensical to say that is an edge. This is true even if you ask me why and I explain the 'reason' for the trade. You can't say, 'hey that makes sense, let me do it' and expect to replicate the results.

If you have the ability to make money over time, because your system has a high win ratio, or despite your system has a low ratio, you have an edge. Simple as that.

If you have clearly defined rules that are unambiguous, and when another trader reads them he knows exactly what to do and when to do it, then there's no reason to assume that anyone else can't replicate the same results.

"Your edge begins with the knowledge you gain through your research and testing that a particular price pattern or market behavior offers a level of predictability, and a risk to reward ratio that provides a consistently profitable outcome over time." - dbphoenix

If you don't know the odds before you put a trade on, you're just gambling.

 

[Paul71]

For a cockney, yes, its one of those things round your 'ouse.... an 'edge guv'nor....

Cor blimey!

 

[new_trader]

If you have clearly defined rules that are unambiguous, and when another trader reads them he knows exactly what to do and when to do it, then there's no reason to assume that anyone else can't replicate the same results.

That is utter rubbish! Next you will say that an edge can be automated...

 

[kenobi]

FW,

This is a bit hypocritical coming after your speech about advisors. It wasn’t a problem until reps were visible.

thanks mate, but just ignore the comment as i do. the chap is clearly picking a fight.

you need 2 for a fight, and I for one, refuse to waist my energy and time discussing with the mentioned individual.

.....the greatest edge of all is winning without fighting

 

[firewalker99]

That is utter rubbish! Next you will say that an edge can be automated...

new_trader, you might think you know what an edge is, but until a trader finds his edge he's just going along what others said.

I might be quoting other people, but at least I've given ample examples of what to do and how to do it. If (a) a trader clearly lays out his rules and (b) the person on the receiving end is reasonable intelligent, and (c) that person is disciplined to follow these rules, than yes there is no reason to assume one cannot replicate these results.

Do you honestly think that, of all the thousands of traders, there are not two people who practice a very similar approach to trading?

When, or if, you find yours, then we might continue this discussion. Otherwise it's just all hypothetical really.

 

[Paul71]

Here's one, from Douglas:

"An edge is nothing more than an indication of a higher probability of one thing happening over another."

What about a definitive edge? Something that definately happens, using any TF or instrument/vehicle. The ultimate edge, it exists, we're just too wrapped up in avoiding it, albeit non-intentional.

 

[nine]

In an environment that is always uncertain --- I am amazed by the incredible certainty of people who are probably participants.

 

[firewalker99]

That is utter rubbish! Next you will say that an edge can be automated...

Do casinos have an edge? Or is that a different type of edge? It's important to know, because it seems like we are talking about two different things. Are you saying that if a casino automates it's roulette, it will stop making money?

 

[new_trader]

new_trader, you might think you know what an edge is, but until a trader finds his edge he's just going along what others said.

I might be quoting other people, but at least I've given ample examples of what to do and how to do it. If (a) a trader clearly lays out his rules and (b) the person on the receiving end is reasonable intelligent, and (c) that person is disciplined to follow these rules, than yes there is no reason to assume one cannot replicate these results.

Do you honestly think that, of all the thousands of traders, there are not two people who practice a very similar approach to trading?

When, or if, you find yours, then we might continue this discussion. Otherwise it's just all hypothetical really.

Your reply is inconsistent with logic and you resort to personal attacks to support it. Just because I don't join in the DOW thread melee doesn't mean I don't have an edge. An edge is non transferable, if you think it is then you don't have one.

that person is disciplined to follow these rules, than yes there is no reason to assume one cannot replicate these results.

Mechanical philosophy, pure and simple.

 

[firewalker99]

Questions

Do you realize what the probabilities of most odds-based business are?

Have you contemplated that you can make money even if you don't have an edge?

Are you aware that you can come out on top of a negative expectation game?

Do you realize that there are traders out there who have an edge, not because of their actual trading rules, but because they have a complex money management strategy that makes them money over the long run?

 

[new_trader]

Do casinos have an edge? Or is that a different type of edge? It's important to know, because it seems like we are talking about two different things. Are you saying that if a casino automates it's roulette, it will stop making money?

The edge is inherent in a fixed odds system! :idea:

 

[new_trader]

Have you contemplated that you can make money even if you don't have an edge?

Maybe I am missing something. I don't agree with what you think an edge is...and now you say that you can make money without one!?

Did you realise you can still sing and dance without a widget?

 

[firewalker99]

Your reply is inconsistent with logic and you resort to personal attacks to support it. Just because I don't join in the DOW thread melee doesn't mean I don't have an edge. An edge is non transferable, if you think it is then you don't have one.

Mechanical philosophy, pure and simple.

Clearly, you are somehow convinced that all these people that make money trading using a mechanical approach are wrong or just lucky or whatever.

Believe me, I'd be the first to say that a discretionary approach opens more possibilities, but if somehow some people manage to profit from their automated approach, are you to say they don't have an edge? Tell me, what do they have then, that makes them money over the long run? Is it luck? Is it a statistical aberration?

If an edge is not transferable, than are you saying that there are no two traders out there who put on a trade at the same time for the same reason with the same result? It's very naive to believe that. After all, just come sit next to me, press the same buttons when I tell you to and you'll have the same results. It might not be your edge, but the elements that make up for an edge are really not that unique.

Do you believe Larry Williams had an edge when he won the World Cup Championship of Futures Trading? How about his daughter, who, at the age of 16, managed 1000% return? Sure, they might be using a different approach, but it's more likely she had acquired the same skills as her father to gain her an edge.

 

[firewalker99]

Maybe I am missing something. I don't agree with what you think an edge is...and now you say that you can make money without one!?

Did you realise you can still sing and dance without a widget?

If I define as edge as "an indication of a higher probability of one thing happening over another.", then yes you can make money even if you have a lower probability of one thing happening over another.

If you don't understand that, well than it's seriously time you talked to some of the big boys out there, who make loads of money by being right only 20-30% of the time.

Do you know how low the edge of a casino is?

 

[new_trader]

Clearly, you are somehow convinced that all these people that make money trading using a mechanical approach are wrong or just lucky or whatever.

Believe me, I'd be the first to say that a discretionary approach opens more possibilities, but if somehow some people manage to profit from their automated approach, are you to say they don't have an edge? Tell me, what do they have then, that makes them money over the long run? Is it luck? Is it a statistical aberration?

If an edge is not transferable, than are you saying that there are no two traders out there who put on a trade at the same time for the same reason with the same result? It's very naive to believe that. After all, just come sit next to me, press the same buttons when I tell you to and you'll have the same results. It might not be your edge, but the elements that make up for an edge are really not that unique.

Do you believe Larry Williams had an edge when he won the World Cup Championship of Futures Trading? How about his daughter, who, at the age of 16, managed 1000% return? Sure, they might be using a different approach, but it's more likely she had acquired the same skills as her father to gain her an edge.

FW,

I am not going to dispute the fact that people make money trading. People make money working, does this mean they have an edge? People attain a level of success in many fields, but there are always people at the top. Does this mean that the ones at the top don't have an edge? Why do people strive to be number 1? Why do only a few achieve that status?

 

[new_trader]

If you don't understand that, well than it's seriously time you talked to some of the big boys out there, who make loads of money by being right only 20-30% of the time.

And this is the basis of your argument? Did you know you can earn a living without having to go through an education? If you don't understand this then it's seriously time you talked to some of the toilet cleaners out there..

[No offence to toilet cleaners]

 

[firewalker99]

What about a definitive edge? Something that definately happens, using any TF or instrument/vehicle. The ultimate edge, it exists, we're just too wrapped up in avoiding it, albeit non-intentional.

If you believe that something is definitely going to happen, you're going along with "everything is known in advance". You might be 99% right, (and I know traders who manage to get 9 out of 10 right), but you cannever account for the unexpected. Where you aware that the Fed was going for an unexpected, premarket, rate cut (if I recall correctly two months ago), which sent the markets much much higher immediately?

 

[firewalker99]

And this is the basis of your argument? Did you know you can earn a living without having to go through an education? If you don't understand this then it's seriously time you talked to some of the toilet cleaners out there..

[No offence to toilet cleaners]

Your analogy is flawed...

I ask again, how big is the edge casinos have, and how much money do they make?