Feb 27 • General discussion
What does it mean to have an edge in Trading?
If a trader or investor has an edge, they have an advantage that makes them more likely to be profitable than other market participants. Their profits often come from mistakes, emotions, egos or inexperience of other traders and investors.
Here are ten edges that a trader can develop in the markets:
- A positive expectancy model.
- A profitable mechanical trading system.
- A discretionary rule-based strategy that creates more profits than losses.
- A positive risk/reward ratio on entry.
- Cutting losses short and letting winners run.
- Backtested signals that have wins on average that are bigger than the losses.
- Discipline to follow a good trading plan.
- Risk management that allows survival during losing streaks.
- A high win rate with small losses for losing trades.
- Proper position sizing.
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What does it mean to have an edge in Trading?
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