The EDGE of a trader
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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 love this words " 1. Trading is a marathon and final result can be calulated only on a series of trades. " yes, it is right, we do trading for longer time or lifetime, we want to build a great career, success and enjoy the life with the better one, and so, there is no instant way, we just need to keep learning and practicing .
    and it is wrong concept if some of us want to get it in a short time,in a night , and to be a good trader and success without sacrifice

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    Quote Originally Posted by newentry View Post
    i love this words " 1. Trading is a marathon and final result can be calulated only on a series of trades. " yes, it is right, we do trading for longer time or lifetime, we want to build a great career, success and enjoy the life with the better one, and so, there is no instant way, we just need to keep learning and practicing .
    and it is wrong concept if some of us want to get it in a short time,in a night , and to be a good trader and success without sacrifice
    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

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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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    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
    yes friend, we can not make it in a short time and even from them who have good brain and smart , not easy to master this business, and especially about emotion controlling and psychologies as the biggest obstacle for many traders, so forex is a long journey and we need a time to understand it with well

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    Quote Originally Posted by newentry View Post
    yes friend, we can not make it in a short time and even from them who have good brain and smart , not easy to master this business, and especially about emotion controlling and psychologies as the biggest obstacle for many traders, so forex is a long journey and we need a time to understand it with well
    it is a long lasting money making issue, it can not be done with rush, traders gets to understand the market and know the way to work with it first above anything else. Controlling emotion is one thing traders should put in mind too, without emotion controlled, there can not be a good trader.

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    Quote Originally Posted by silverlady View Post
    it is a long lasting money making issue, it can not be done with rush, traders gets to understand the market and know the way to work with it first above anything else. Controlling emotion is one thing traders should put in mind too, without emotion controlled, there can not be a good trader.
    yes , traders have to control the emotion with well and it will give them a clear mind to think and not so rush to enter the market before see the right correction , and at this side, traders will do it carefully and do not want to take the risk for nothing,
    so everything here will be done correctly, and for some condition, they will know how to recover it

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    Quote Originally Posted by silverlady View Post
    it is a long lasting money making issue, it can not be done with rush, traders gets to understand the market and know the way to work with it first above anything else. Controlling emotion is one thing traders should put in mind too, without emotion controlled, there can not be a good trader.
    in high-risk businesses such as trading Forex, the loss can not be avoided, but we can minimize the loss, for that we need to set a good risk management, so that when experiencing loss, health of our trading account is not compromised and our trading activities can still be made as usual, the trading system and the same way as before we experience loss.

    if we had a good determining the risk management we also need the appropriate money management so that our margins are not depleted in forex, if it is determined we should discipline

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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
    Yep the more you are able to engage in the right idea of trading thats how more the market feeds and rewards you ,there is no hurry in trading that is we have to keep on doing the right thing as a trader and are able to put together the given effrt of a trading positions the market is dynamic and can be really aggressive sometimes

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    Quote Originally Posted by newentry View Post
    i love this words " 1. Trading is a marathon and final result can be calulated only on a series of trades. " yes, it is right, we do trading for longer time or lifetime, we want to build a great career, success and enjoy the life with the better one, and so, there is no instant way, we just need to keep learning and practicing .
    and it is wrong concept if some of us want to get it in a short time,in a night , and to be a good trader and success without sacrifice
    I believe that any trader in the forex market if it wants to succeed in this market must be trained and learns well and should have the trading strategy successful to help him succeed in the work of the high profits in this market and we must follow everything new in this market and should be trained well at the expense of experimental

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