The EDGE of a trader - Page 2
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  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.

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    I have read your this post very carefully its contain many good points this is a very good thread for our learning a very good edge knowledge is very important for a trader in forex it will help us to find out our good and weak points in forex and we can work well with this system we should know very well about our strength in forex

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  3. #12
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    beginner trader should start practice in demo account at least 6 minths before make deposit in real account, .use demo account for increasing your skill and learn how to analyze forex market trend , keep discipline and patient to apply your system and plan, always use good money management to limit your risk

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    Friends in forex we can become a successful trader only if have very good knowledge about our strong points a good successful forex trader always do trade with his best strategy he know very well where have to buy and sell and that's a great edge of trading that's why we must know about our edge in forex it will give us nice profit for sure in forex

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    Quote Originally Posted by Khimi234 View Post
    Friends in forex we can become a successful trader only if have very good knowledge about our strong points a good successful forex trader always do trade with his best strategy
    For being successful in forex we need to have good knowledge about important factors of market. But besides that we also need to focus our weak point of trading and strengthen that so that we don't suffer much because of that. And having some good trading strategy and use that in right time is also essential.

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    Quote Originally Posted by tanvir33 View Post
    For being successful in forex we need to have good knowledge about important factors of market. But besides that we also need to focus our weak point of trading and strengthen that so that we don't suffer much because of that. And having some good trading strategy and use that in right time is also essential.
    We loss is totally because we doing mistake in our analysis.Either we doing the mistake in analysis for predict the next movement of the price or we doing mistake in our analysis for managing our margin to trading.Whatever mistake we do,if we just ignore that mistake,we will surely doing the mistake again in our next trading.

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    Quote Originally Posted by Value trader View Post
    1. Trading is a marathon and final result can be calulated only on a series of trades.
    yes that the way should lefts of the different results with the different manage of the plan to work with the distincts of customs to put with the tules of the trading as comes with the good consideration on approaching the best with the customs to had with the profiles of the trading plan.

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    In my opinion trader must first identify his own trading niche , and that will help him to find his own trading way, and trading style that is most suitable to him. I do believe that there is lot of different ways of success in forex trading, and actually what is good way for one trader, at the same time it could be reason for disaster for other trader. I think that we must first identify our main strengths and weaknesses.

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    Quote Originally Posted by Quid View Post
    You really think what you should be authentic at all it will not give good knowledge,suggestion by suggestion then you read it without saying a word it will make you just to be listener,create the new thing which is more like yourself,be what you imagine to create good strategy.
    We have the ability to do the trading in the way that will help us all, But what I see is that traders do not look forward to the continuation of their trading systems, try as much as you can to do the trading in a way that will bring a good trading system with a good money management, this will increase the way traders will get success.

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    the edge of a trader : that good trader comes into entrance with the good system by the return of the good work of the development that the focs left the rest with the different approach into consideration with the spends on the request to spares more of the chance on gaining with the relatives on difference by the choice on putting distincts of strategics with the submission.

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  11. #20
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    Quote Originally Posted by Quid View Post
    You really think what you should be authentic at all it will not give good knowledge,suggestion by suggestion then you read it without saying a word it will make you just to be listener
    It's right that there are many posts on good topics in here. But reading those only can give some knowledge to the reader, but he/she won't be able to understand it clearly. It's natural that after reading a topics,it can't be acknowledged completely, but discussion with others highlight many important element and enable to have rich informations.

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