Comments on: A Little Edge is All You Need http://blog.afraidtotrade.com/a-little-edge-is-all-you-need/ Helping traders overcome fears and emotions in trading Thu, 09 Feb 2012 12:53:25 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Corey Rosenbloom http://blog.afraidtotrade.com/a-little-edge-is-all-you-need/comment-page-1/#comment-20314 Corey Rosenbloom Fri, 25 Jan 2008 16:26:34 +0000 http://blog.afraidtotrade.com/a-little-edge-is-all-you-need/#comment-20314 Jsp, Thank you for reading and for commenting. Traders believe that they have to be right all the time, and that pressure leads to intense stress. In reality, it doesn't always have to come down to a percentage edge for traders, such as 51% winners to 49% losers. It can also come down to a dollar or mathematical capital won/lost edge in terms of how much one wins on the winning trades and loses on the losing trades. Big name trend followers and funds may have win rates of 25% or less, but amass large profits because losers are cut relatively quickly and painlessly, while the winners produce outsized gains for months if not years. But you're right - execution costs and information fees/brokerage, etc cut into the statistical and financial edge of individual traders so it's best to have as large as edge as we reasonably can. Jsp, Thank you for reading and for commenting.

Traders believe that they have to be right all the time, and that pressure leads to intense stress. In reality, it doesn’t always have to come down to a percentage edge for traders, such as 51% winners to 49% losers. It can also come down to a dollar or mathematical capital won/lost edge in terms of how much one wins on the winning trades and loses on the losing trades.

Big name trend followers and funds may have win rates of 25% or less, but amass large profits because losers are cut relatively quickly and painlessly, while the winners produce outsized gains for months if not years.

But you’re right – execution costs and information fees/brokerage, etc cut into the statistical and financial edge of individual traders so it’s best to have as large as edge as we reasonably can.

]]> By: jsp9999 http://blog.afraidtotrade.com/a-little-edge-is-all-you-need/comment-page-1/#comment-20129 jsp9999 Fri, 25 Jan 2008 03:27:31 +0000 http://blog.afraidtotrade.com/a-little-edge-is-all-you-need/#comment-20129 I think trading is similar, if not more, to the roulette odds (5% house edge) due to trading cost, market makers, execution speed, etc. I am sure there are tens of thousands other disadvantages as well for individuals such as technology, research, trading capital, emotional bondage, etc. So in order to have that "small" edge, it takes quite a big leap in some ways for individual traders. I am still learning to try to find that "small" edge myself. Thanks for your knowledgeable insights into the market. I think trading is similar, if not more, to the roulette odds (5% house edge) due to trading cost, market makers, execution speed, etc. I am sure there are tens of thousands other disadvantages as well for individuals such as technology, research, trading capital, emotional bondage, etc. So in order to have that “small” edge, it takes quite a big leap in some ways for individual traders. I am still learning to try to find that “small” edge myself. Thanks for your knowledgeable insights into the market.

]]> By: Link Love Friday | A Trade A Day http://blog.afraidtotrade.com/a-little-edge-is-all-you-need/comment-page-1/#comment-20099 Link Love Friday | A Trade A Day Fri, 25 Jan 2008 01:56:19 +0000 http://blog.afraidtotrade.com/a-little-edge-is-all-you-need/#comment-20099 [...] could link to just about everything this guys writes about. Especially when discussing your Edge and [...] [...] could link to just about everything this guys writes about. Especially when discussing your Edge and [...]

]]> By: Poker » Blog Archive » A Little Edge is All You Need http://blog.afraidtotrade.com/a-little-edge-is-all-you-need/comment-page-1/#comment-20045 Poker » Blog Archive » A Little Edge is All You Need Thu, 24 Jan 2008 23:58:02 +0000 http://blog.afraidtotrade.com/a-little-edge-is-all-you-need/#comment-20045 [...] Afraid to Trade.com Blog - Overcoming Stock Market Fears wrote an interesting post today on A Little Edge is All You NeedHere’s a quick excerpt In trading, we seek to identify small windows of opportunity where we expect one event to occur over another event, given that we can monitor our risk should something go wrong. Take a moment and think about how you define your trading edge and what it means. An edge is simply nothing more than a situation where the probability of one outcome happening over another has tipped slightly to favor that one event. An edge does not guarantee an outcome, however. There is no edge to a coin toss [...] [...] Afraid to Trade.com Blog – Overcoming Stock Market Fears wrote an interesting post today on A Little Edge is All You NeedHere’s a quick excerpt In trading, we seek to identify small windows of opportunity where we expect one event to occur over another event, given that we can monitor our risk should something go wrong. Take a moment and think about how you define your trading edge and what it means. An edge is simply nothing more than a situation where the probability of one outcome happening over another has tipped slightly to favor that one event. An edge does not guarantee an outcome, however. There is no edge to a coin toss [...]

]]> By: Stock Market » A Little Edge is All You Need http://blog.afraidtotrade.com/a-little-edge-is-all-you-need/comment-page-1/#comment-20027 Stock Market » A Little Edge is All You Need Thu, 24 Jan 2008 23:09:41 +0000 http://blog.afraidtotrade.com/a-little-edge-is-all-you-need/#comment-20027 [...] Here’s another interesting post I read today by Afraid to Trade.com Blog - Overcoming Stock Market Fears [...] [...] Here’s another interesting post I read today by Afraid to Trade.com Blog – Overcoming Stock Market Fears [...]

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