Where's the Edge?
After spending many years lurking on trading forums, looking at hundreds, of systems and strategies, I always have been left wondering, where is the edge?
The system looks great. The chart is a work of art for Pete's sake. The ideas and logic behind the entries and exits sound logical, but the edge is never seen. All too often, it's nowhere to be found.
Some people argue it's in risking less than you stand to make. But simple math easily debunks the idea that a particular risk:reward ratio alone can give you an edge.
Technicians will tell us it's in a special indicator or a special combination of indicators that are built on secret codes. At this point, every indicator has been data-mined to hell and back to find what works best on any particular pair. Unfortunately, as soon as you move into the future, the models break down, and your secret settings no longer work because the market has changed. It always has and it always will.
Some argue it's in the trader. Only the ones who master themselves can master the charts. This also sounds convincing, and in all honesty, is true, but not because the edge is in the trader. The edge can only be exploited by the trader... assuming they have mastered themselves.
The edge has to be somewhere else.
It can't be in risk management...
It can't be in an indicator...
It can't be in the trader...
So where the **** is it!?!
I have some ideas on where I believe it lurks that I will share...
But I am curious, where do YOU think the edge lies?
After spending many years lurking on trading forums, looking at hundreds, of systems and strategies, I always have been left wondering, where is the edge?
The system looks great. The chart is a work of art for Pete's sake. The ideas and logic behind the entries and exits sound logical, but the edge is never seen. All too often, it's nowhere to be found.
Some people argue it's in risking less than you stand to make. But simple math easily debunks the idea that a particular risk:reward ratio alone can give you an edge.
Technicians will tell us it's in a special indicator or a special combination of indicators that are built on secret codes. At this point, every indicator has been data-mined to hell and back to find what works best on any particular pair. Unfortunately, as soon as you move into the future, the models break down, and your secret settings no longer work because the market has changed. It always has and it always will.
Some argue it's in the trader. Only the ones who master themselves can master the charts. This also sounds convincing, and in all honesty, is true, but not because the edge is in the trader. The edge can only be exploited by the trader... assuming they have mastered themselves.
The edge has to be somewhere else.
It can't be in risk management...
It can't be in an indicator...
It can't be in the trader...
So where the **** is it!?!
I have some ideas on where I believe it lurks that I will share...
But I am curious, where do YOU think the edge lies?
ri · skuht