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EDGE ideas discussions thoughts about what Edge is
I think there were a lot more true edges decades ago...today markets have become so efficient it is virtually impossible. In the 80's, savvy players could exploit mispriced options fairly well during a time when that market wasn't widely understood...unlike today where you are trading against the smartest math geniuses in the world lol. The SOES bandits are another example of an edge that put the odds so heavily in your favor it was almost guaranteed money (front running lol). Arbitrage is what I would consider a pure edge and good luck finding those...and having the capital and technology to exploit them effectively.
Patterns are not an edge...hell, even "proper" money management isn't an edge considering follow through is extremely rare...choppy price movement will have you bleeding to death with your small losses like a good little trader waiting for follow through that never covers your string of losses.
I used to be in higher education (academic). When you look at sciences, steady progress comes from the correct application of methods. For ground breaking innovations (in science and probably also elsewhere) however one basic priciple is analogy or metaphor. The transportation of "foreign" concepts into the given field (e.g. physics have their "particle zoo", biology has their "cells" (yes, read the history), car design analyses fish etc.).
My edge comes from martial arts (45 years) and sailing small fast dinghies (over 60 years).
Most important however is that on top of the import of understanding from another area of your personal expertise into your trading you need solid methods in order to advance your consistency. You name it: position size, stops, order management, money management etc.
I'm not sure that would be considered an edge if he doesn't drive in runs or score. That's kind of like having a high win rate yet still losing overall because your losses are much greater than your wins.
I attribute my sucess to trade management. I attempt to cut losers short and let winners run. Although my win rate is less than 50%, my winners on average are 3 times greater than than my losses.
"The days when I keep my gratitude higher than my expectations, I have really good days" RW Hubbard
I agree.Your edge can be just one thing or a combination of things that work together to give you an edge. And you definitely should be able describe it
Maybe I look at it too literally, or too mathematically (or maybe these two things are the same) but to me having an "edge" just means that all the aspects of my trading plan, including trade management after the entry, would combine in such a way as to produce a "proven, positive long-term net expectation".
I do not have a proven edge yet.
I am working on it. Slowly and for a long time, while I trade only on demo/sim.
