The EDGE of a trader - Page 11
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Thread: The EDGE of a trader

  1. #1
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    The EDGE of a trader

    Hi traders! Many traders want to pick a profitable strategy, but not too many traders ask a question - "does this strategy have an EDGE?". Ability to earn money in a short-term time perspective is not an edge itself, it's just a correspondence of your strategy and current market conditions.

    The best way to understand the concept of EDGE it is to remember how casinos make their profit. They generate significant deal flow from their clients - they force them to make more and more bets and eventually, casino earns money and its edge can be explained in a few words: limited payoff per stake and limited stake size. That's it. That's the edge. All they have is to generate enough turnover to realize that edge.

    Edge can be formulated in a very simple way - for example, it can be ability of the market to liquidate quickly when it has exceeding inventory, or it can be ability of the trend to keep going in the dominant direction rather than reverse. It should be very simple, it's not a strategy, it's a core principle that allows you to beat the average. All you have to do is to have more situations that provide you your edge - in other words, more markets and more setups that have those profitable (for your trading style) inefficencies.

    Why do you need decent turnover to realize your edge? What about "trade less to earn more" principle? Well, the fact is that overall predictibility of the market is relatively low, and even if you have "A"-class conditions for your trade, you have no guarantees of profitable outcome. The very next trade doesn't make sence in terms of final outcome. Next 100 or 1000 trades will definitely make sence.
    So, there are core principles that should be respected by trader:

    1. Trading is a marathon and final result can be calulated only on a series of trades.
    2. Edge or your core trading idea should be simple. You should have opportunity to find it on any market. The best trading edge is that relies on fundamental unchanged behavior of market participants (say, trendiness).
    3. To realize your edge, you want to have more what works. More markets and more good setups.

    For example, I formulate my edge in the following words:
    I use ability of the strong trend to have better odds of continuation, and trade against couter-trend short-term inventory. It means that in my trading first I have to define a trend, then to define exact entry point - for entry I tend to seek for exceeding inventory of counter-trend traders. Trend creates market conditions that will help price action to go further, entry point will provide me good timing for my trade and will help me to reduce risk.
    So, you see that trend plays sigificant part in my trading, that's why I want to have more currency pairs (and other instruments as CFDs) for better trade selection. Also, I like to trade liquid markets (mostly currencies), because overbought and oversold conditions occur pretty frequently on these markets. Combining trendiness with short-term market logic helps me to move forward in my trading.

    How would you formulate YOUR edge?

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    Last edited by Value trader; 03-26-2014 at 07:40 PM.

  2. #101
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    Quote Originally Posted by jonking View Post
    it is certainly very true that the best way a trader can have an edge in this business is by focusing on learning. Also a trader must have targets. A good target should be easy to acheive when a trader removes the bad emotion of greed from their trading.
    traders will not be separated from their destination before they could get this trade better and successful because somehow in this business then traders should strive to make their target and then try to reach it with their skills in the trade so that sometime in the future if they really work hard it will be able to achieve success with unlimited income in this business

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  3. #102
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    For me, it's the most important vendors of the market type. The structure of the deal, you have the right to market and increasing efficiency guinea limits recommended that the ability to trade their way out. Risk is good for all traders to deal with low maintenance.

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  4. #103
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    It is traders that will define what is making the trading to work for them better than the others, and looking at this, such trader will take a serious plan on it, those things that will not be the same ways the other traders do it, this will list you up better than others, you have the right to plan anyhow.

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  5. #104
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    i see. forex trading is not sprint where we have to run with faster and use all our power in a short time. it is like demo contest. but at real account trading. we just need to trade with relax, we have much time to think twice before make a decision and it is necessary to get the best results and make us stay at forex trading business for longer and make it profitable. but then we can increase our trading quality with take more learning and practicing to fix and complete the weakness and even develop it.

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  6. #105
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    I like this forum able to learn many new threads thanks admin nice article edge in Forex help a trader the amount of profit and loss trader calculate weekly,trader start to success must will be profit,about strength this market for long time a great career success the life and so learning.

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  7. #106
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    Quote Originally Posted by newentry View Post
    i see. forex trading is not sprint where we have to run with faster and use all our power in a short time. it is like demo contest. but at real account trading. we just need to trade with relax, we have much time to think twice before make a decision and it is necessary to get the best results and make us stay at forex trading business for longer and make it profitable. but then we can increase our trading quality with take more learning and practicing to fix and complete the weakness and even develop it.
    It is not sprint when you are trading but for the traders who don't learn well will not move from the state,we like to learn when it is interesting,there are many thing interesting about forex,from price action to other information of trading which we have very well for ourselves.

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  8. #107
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    I have understood one point after reading this article again that the edge means the mechanism of the trading strategy about how to make the money.Every strategy has a core logic that how does that strategy creates the profit i think that is the edge of that strategy and the strength.

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  9. #108
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    If you ask me, a long-term trading or trading by the new method should be hedging. This procedure is relatively safe for the poor newbies theory and practical experience. You can go directly to short-term trading, will be very dangerous because of the potential for an open position is still very nice for beginners

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  10. #109
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    more market and the good setup as to work with the evaluation of the running strategics to add more with the adjustment to enjoy the good improvesment by the different choice of options to put with the spends of the risks.
    to gives more of the allowance on spending the good resources to work with the different customs with the trading projects.
    that is to focus on the manage to earns more with the good return on the system analytics and the evaluation with the monitoring of the market profiles of the choice.

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  11. #110
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    This really is genuine post which contains essential recommendation in my experience likewise and extremely important. With ability and my understanding I didn't obtain the ethical bravery to place my remarks onto it in the place of attempting to preserve in my own further deals and taking it nicely. I love this community greatly where I will in a position to discover several products that are new.

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