The EDGE of a trader - Page 3
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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. #21
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    [lang=ar]I think it does not require a certain age to work in the forex market forex market is light doors to anyone without the requirement for a certain age it is possible to elderly or young, or anyone that works in the forex market, provided that the training and learns well and has a good trading strategy[/lang]

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  3. #22
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    Every time you change a strategy for Forex trading, then first of its experience in the forex demo account, because when you reach your money real, it is better to be assured of the system you're using. The plan Forex and Forex strategy is two units animate one value, and Istgriqan time and thinking and patience. When bringing your trading account, you will learn how this was done.

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  4. #23
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    Quote Originally Posted by kagho View Post
    yes forex trading is a marathon and not a sprint where the finish line is just a stretch ahead so all traders are surpossed to look at the long term goals in trading and hence should not be distracted by the darshing of the squirel which come in form of minor losses during trading
    [lang=ar]Does not require that owns stores in the forex market a certain age if you want to succeed in the forex market should be trained and learn well in this market and must possess a successful trading strategy in this case will not succeed either in the forex market is not so good for you nor age nor other[/lang]

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  5. #24
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    After seven years of trading I am near that point to say good bye to technical and fundamental analysis. I think that we can only be profitable if we use some predefined and historically tested trading strategy , with profitability not less than 70 percent. So I do not believe any more in current technical analysis and good current opportunity in the market only in strict predefined rules.

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  6. #25
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    Small trading ideas are always the best , like " avoid loosing too much " or "try to make only winning trades" . A good edge is a basic for forex traders , and could enable you to developp your trading system the best way . You should know that is only for the motivation , the real work should be done on the trading session . That could offer some real advantage on the long run .

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  7. #26
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    Quote Originally Posted by elniel View Post
    that ia a wise thing to say no matter what was your trading style you should never forget to consider other things becaue the market is not stable and it need a lot of flexibility in order to be able to deal with all conditions that comes up in thw market
    From my point of view that the action in the forex market does not require a certain age it is possible to anyone who works in the forex market, provided that a well-trained and learn and follow all that is new in the forex market and has a good trading strategy to help him on the trading in this market

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  8. #27
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    Hello, I like your subject saltt light on the most important points, for me befor all I start to looking with the shart with 1 month time fram I do my technical analysis whene I finish I do an other analysis with 1 week time fram and the same with 1 Day and 4 hour I do all this to avoide trading against the trend, and after I focus with shart time fram 4 H and 1 h and 30 min and waiting the best point to open position and of cors I dont wait to get the profit in the same time because I work at Long time and I know that I must be patient, and I dont open a lot of positions for lot of paire it Cause confusion I prefer focus on just 1 pair
    globally its my way of trading

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  9. #28
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    i understand about edge my know i understand what i my edge and when i am not trading according to my edge i did not feel comfortable with my trades because i chose the wrong entry point i did not increase the trades to exit from market with some profit, you cocted very nice example that trading is like a marathon and result based on serious of trade this article helps us to understand our edge.

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  10. #29
    Rookie amjad23510's Avatar
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    very good information you have provided.there are many strategies available but we should try our best to get best results from a strategy.firstly work in demo account with any new strategy and then apply it in the real account.it is best way to get a estimate that the strategy is working or not.

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  11. #30
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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.
    [lang=ar]I think that anybody at any age it is possible to work in the forex market depravity Forex is open to anyone at any age if you want to succeed in the forex market should be trained and learn well, and long enough and must possess trading strategy good help you succeed in the forex market[/lang]

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