The EDGE of a trader - Page 5
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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. #41
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    The trade is considered to be good for traders. After each transaction, the merchant, because he was disappointed in his calculation of the success rate of a few consecutive starts. However, transactions between us, some of them will be profitable, you need to be a part of it. The same amount of profit / loss will be. May net loss / gain calculation would prefer to. For day traders, but they share more than two hours to calculate calculations, it is recommended that it is not part

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  3. #42
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    Quote Originally Posted by COMANG View Post
    only success so difficult in forex if only to join and so I think this is not so hard to get us and I have advice for traders in this business especially you are a novice trader then you should learn in this business from scratch to obtain trade will be better and will further develop yourself with the knowledge in this trade because of the knowledge you will be able to success in this business
    But the problem is not easy to have a good knowledge in trading, unless we already have a lot of experience and understanding of the essence of forex trading, so that we find the right mindset. Basically traders are not aware of and always confident when finding a new system, and later used, ultimately fails, then look for another system, this condition continues over and over until you feel bored, and finally realizes that simple systems are the most good. This is a beginning of a change. So it will feel that forex is not difficult nor easy. But forex is simple.

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    If you lose, be patient. If you win, stay humble

  4. #43
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    If you ask me, it is the formality on the dealer that is certainly biggest in the market. Inside creation regarding authentic trading, it is advisable that you just do it accurately how that will reduce the pore on the market and also increase your personal trading expertise and also power. That will work for investors is leaner riks and also larger operations on the trading.

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  5. #44
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    there are traders who believe that they have an edge, and there are traders who believe that they need an edge and are consequently looking for one, and there are traders who laugh every time someone mentions an edge, and then make another profitable trade

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  6. #45
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    EDGE of trade will be vary from one trader to others but this is not for new beginer because beginner at first time just make their knowledge more stable in operating forex trade on how to make a good system that already to use, but edge of trade will never get with novice.

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  7. #46
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    You have to constantly focus and pay attention to exactly what you’re doing, what your program is, and focus on it. And then the discipline will follow. If you don’t focus on it, it’s too easy to say I’ll take the profit – I’m going to go for lunch. It can be developed in a lot of ways. You can almost instinctively have it but most traders don’t.

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  8. #47
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    Quote Originally Posted by ali222 View Post
    You have to constantly focus and pay attention to exactly what you’re doing, what your program is, and focus on it. And then the discipline will follow. If you don’t focus on it, it’s too easy to say I’ll take the profit – I’m going to go for lunch. It can be developed in a lot of ways. You can almost instinctively have it but most traders don’t.
    Focus, concentration, strong determination all of these is very much important for the traders so that they can be able to succeed in their trading life. Hence, traders should always make sure that they are very much aware of the true fact that there is nothing like defining the traders capability, their goal all of which should be very much realistic enough. Causal way of trading is not going to be helpful if we desire great heights.

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  9. #48
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    in this market we can make best experience important suggestion to me also. With my less knowledge and skill I failed to get the moral courage to put my comments on it rather than accepting it well and trying to maintain in my further trades and we make that it is quick reply and many more things.

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  10. #49
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    Exceptionally pleasant article esteem merchant sir I adore your strings forever its an incredible joy for me to peruse them I am concur with you a dealer ought to think about his edge in forex a great edge in forex help a broker to think about his quality in this business sector and alongside it we ought to check with our powerless focuses additionally

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  11. #50
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    Quote Originally Posted by Ashviniurs View Post
    True, the accessibility to this highly potential forex market is very much easy and once the traders have gathered some good knowledge regarding the forex market they can always be more confident
    Forex market is highly potential and profitable. But for being a successful trader a trader needs to learn it and master on it. This won't come easily to a trader, but success will come to a trader with enough knowledge and effort. He needs to have good trading setup and knowledge to execute that,but the trader needs to have patience for that.

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