your ' trading Edge '

[bbmac]

Thank you for the replys. A provocative post usually illicits such, lol.

TheBramble: I appreciate the difference between 'willing' and 'able' in respect of responses to the question about describing one's own trading 'ede.'

rols/hoggums: I find it hard to accept that if someone posesses a trading egde, that it can't be put into words, (even if that form of words is generic and no revealing of any proprietary knowledge. For example a contact of mine answered the question by saying ' Exploiting the inconsistencies in option pricing via a proprieatry algorithm' Ie from that we can all kind get what he;'s up too, but no proprietary knowledge is revealed.

fibonelli: see the above

dbphoenix: yes, I appreciate your point.


TheBramble: My intention in starting the thread was really just to try and ascertain how many traders could neatly and succinctly sum up their own trading edge, and secondly, to see how many users of the boards would respond. I certainly didn't expect anyone to reveal any proprietary knowledge. Whilst I have posted some explanations as to my particular technical trading edge, that works for me, one of the purposes of sharing knowledge is to gain knowledge, and this has been my general experience.

I agree with you that no real or useful conclusions can be drawn from the response to the thread.

 

[BSD]

This may sound frivolous but that's not the intention, my edge made it's initial appearance after I'd finally got my head firmly around the fact that being wrong more often than being right is a very comfortable place to be if you can drum up the discipline to do what many probably erroneously dismiss as an irrelevant cliché, cutting your losses while letting your profits run.

Do that, be right only one third of the time, have winners that average out at three times the size of your losers, keep bet size large enough to secure meaningful advances for your equity curve but small enough to ensure that you'll survive the inevitable string of successive losers, and you're still far ahead of the majority and in net profitable territory.

As for setups, I also firmly believe in yet another old saw, namely that the trend is indeed your friend.

 

[Hoggums]

cutting your losses while letting your profits run.

I have found - for me, trading longer term than many of you here - that letting my profits run actually reduces my profitability in the long term. This is particularly true when a price surges in a direction and then stalls. Holding on sometimes means the price then pulls back and you give up a significant proportion of your profits before you hit any moving stop.

I have found in such situations, a profit is a profit - take it and run. Then re-enter when the price pulls back - or if there is no pullback, stay out - or average in a new position. Sure you may miss out on some further gains - but in my experience - you actually miss out on reduced profit.

 

[BSD]

Hi Hoggums, I suppose there are as many ways to manage trades as there are net profitable traders out there, and finding out what suits your personality best is probably one of the most important things in getting there.

I work with both ambitious profit targets and a trailing stop based only on price that will allow quite a bit of profits to be given up if that's hit before my take profit.

 

[fibonelli]

I agree with Hoggums.

Here's a fairly extreme example of large profits quickly reducing if you don't have robust exit criteria. Notice the numerous re-entry points.

 

[TWI]

I would echo BSD's sentiments and add that you should always take windfall profits. The great thing is that you can always get back in.

 

[BSD]

you should always take windfall profits. The great thing is that you can always get back in.

Ola TWI, I absolutely agree, when I get a really good move ATR wise I'll take my profits irrespective of all else.

Btw, one thing I wanted to add was that imo a great feature of this board is that it attracts people like yourself and a few others, won't mention names so I won't inadvertently forget another valuable contributor, one of whom sent me some very nice remarks concerning my first post, people with a real and professional trading background.

I believe you mentioned elsewhere here that your trading career spans a rather amazing 16 years which is really quite a statement by itself already, certainly hope mine will last as long.

Markus

 

[FXSCALPER2]

1- Taking setups at s/r levels that give me high reward:risk trades

2- Taking trades (for scalps) that give me a high probablity of coming out a winner AND a place to exit the trade quickly if I am wrong.

 

[donaldduke]

Trading with an edge is really no big deal. You can find hundreds of good trading edges in countless trading books.

The problem for most losing traders is they dont use an edge most of the time.

Emotions often take over and edgeless trading commences.

 

[Trader333]

Emotions often take over and edgeless trading commences.

It is interesting, in view of the fact that most traders that fail do so because of this, that there is not a lot more help available to address it. Telling people that they need to be disciplined is obviously not working well enough.


Paul

 

[shadowninja]

My trading edge

A bit late, but being a bit of a newbie, I held back to consider what to reply with.

My trading edge is about going with the trend and only playing when the conditions are correct. (I've tried all manner of day trading methods and cannot consistently profit unless I just trade the trend; sometimes I lose money but overall, I profit.)

I use technical indicators and trade currency, largely.

 

[kenobi]

i use fibs.

i only trade when price is at 50% fib,

i flip a coin which gives me a confluence of events: 50% probability tails means long, 50% probability heads means short

 

[dbphoenix]

It is interesting, in view of the fact that most traders that fail do so because of this, that there is not a lot more help available to address it. Telling people that they need to be disciplined is obviously not working well enough.


Paul

Actually, there's a great deal of help available. A more interesting question may be why those who need it don't take advantage of that help. An unconscious desire to lose perhaps?

Db

 

[shadowninja]

An unconscious desire to lose perhaps?

I think it was Mark Douglas who wrote that people are taught that you work hard for a living, so if you earn £100 in 10 minutes on FTSE, your subconcious wants you to give it back to the market.

 

[ampro]

A more interesting question may be why those who need it don't take advantage of that help.

You can lead a horse to water db.......

The smart ones do learn it though. And they tend to learn it very quickly. They’re the players who (eventually) constantly work & manage their edge.

They’ll also lead the way when it comes to respecting, appreciating & managing risk.

I guess as long as markets exist, they’ll be the smart & then they’ll be the rest

 

[dbphoenix]

You can lead a horse to water db.......

Interestingly enough, though, if you charge 5000 pounds for the water, the horses line up for it . . .

Db

 

[BSD]

Interestingly enough, though, if you charge 5000 pounds for the water, the horses line up for it . . .

Db

LOL !

Very probably very true.

 

[graemenash]

My edge:

An almost completely mechanical, technical trading approach which uses trend indicators and oscillator divergence to produce signals, and fibonacci retracement/extension concepts to provide trade management procedures resulting in trades with a sufficently high strike rate and risk/reward ratio so as to produce consistent profits over an extended sample.

<breathes out>

P.S Hi Stewart

 

[Paul71]

If you had to describe/summarise your 'trading edge' in one sentence, what would you write:

I need cannon fodder to take the opposite side of my trades, that's my edge.

 

[charliechan]

i just read the first post. this is mine:

confidence.

as long as that confidence is based on sound knowledge (not necessarily complex), there is nothing else that matters.

i cant be more specific because i dont tie myself to one market - but always in futures. i trade different markets at different times for different reasons, but no more than 2 markets at any one time.

jmo