# What does having an "edge" actually mean?



## nomore4s (27 October 2009)

Continuing on from the discussion on the "Becoming competent at forex trading" thread.

I have noticed that having an edge is a statement that is thrown around quite a bit on trading forums but I have never really seen a comprehensive explanation of what an edge actually is. This is my take on it.

Most traders seem to relate an edge back to a statistical advantage due to a pattern, set up or trading method but to me a true edge runs deeper then that. IMO there are very few traders (especially ones who post on forums regularly) that have a true edge over the market - FrankD and Trembling Hand are two who come immediately to mind.

Having an true edge is everything from having a very strong understanding of how the market you trade moves, having strong trade setups with entry & exits triggers, risk, money & trade management, ability to manage watchlists and/or bring new opportunities to your attention, the ability to constantly optimise these factors and constantly adapt to current market conditions but most importantly the ability to be able to perform these tasks consistently over a long period of time.

It's all well and fine having a system or set up that has been back tested and forward tested until the cows come home thinking you have an edge but unless the trader has the ability to apply the system consistently during the right market conditions most traders will at best end up just treading water or at worst slowing bleeding to death.

Being a successful trader means being able to control and manage all these things over many different conditions for many years. This IMO is a true edge- the ability to beat the market consistently over a long period of time, or in other words being a complete trader who understands what makes traders profitable but most importantly can apply that understanding.


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## Temjin (27 October 2009)

I think you have touched the points quite extensively already.

Yes, an edge does not just confine itself to a trading system that exhibits positive expectancy based on past and recent results. 

You have covered other aspects of an edge already. In my opinion, it should extend to the technology employed by the trader, such as the software they use, the broker they use, the reliability of the internet service you use, etc. All these also influences the ability of the trader to actually test, design and implement their systems. 

A trader's financial/lifestyle circumstance should also be taken into an account. For example, a trader who is very reliance on the profit from his/her trading system will be more skeptical to psychological biases than a trader who has a much more relaxed financial position and only looks to build up his capital through compounding alone. A trader's lifestyle should also be taken into account. A stressful trader who has a mid-life crisis with his/her family, or with his colleagues/boss at work, will have a much harder time taking the full advantage of his trading system (even if it has a positive expectancy).

Health is also important in this regards. 

Most traders tend to focus solely on the "trading strategy" alone but seem to neglect other aspects of their life that could negatively affect their edge. There is really so much more into what defines a trader's edge.


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## Wysiwyg (27 October 2009)

So far summarised.

Experience - the ball-park figure of 10000 hours. 

Health - nutrition and exercise, not strapped to the chair all day or night.  

Tools - fast and efficient trading and analysis software, reliable internet service connection and provider, quality data provider.

Self Assessment - mentally capable and attuned to the requirements of securities trading.


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## Mr J (27 October 2009)

I like your post. Edge simply means advantage, so we can apply that in quite a few ways when it comes to trading. The edge I've talked about is what I'd call a 'tactical' edge - the edge of specific trades, or trading strategies (positive ev). The edge you talk about is what I would call more of a 'strategic' edge. This isn't measured in trades, but the overall skill of a trader, though naturally a high strategic edge will lead to a solid tactical edge.. Would that be a fair assessment?

I think considering lifestyle is a little liberal. Anything psychological or financial I would also file under a strategic edge.

Resources would be an edge. Like Wysiwyg says, tools etc, but also data, information, access etc.


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## motorway (27 October 2009)

Mr J said:


> Edge simply means advantage




Only thing it can be !

But Advantage over what ?

Well ---Over what a significant group of others are doing or are *not doing*.

Buying Earlier
Buying Later
Selling Earlier
Selling Later

Buying at all or not
Being patient
Acting Quicker

What Ever
If it puts us at an advantage
Then it is an Edge

An Edge manifests itself working against 
Those doing the opposite
at the wrong TIME
For the Wrong TIME

There is no Edge
unless someone ( proverbial someone )
is PAYING FOR IT...

But Not I think does it Have to be ZERO SUM
More like an ecosystem 

Of liquidity Takers &
Liquidity providers
The interaction
of trend and mean reversion
nesting within each other

It is about finding a niche ( a real one )
in the game of overbought oversold
and Long term trends 


motorway


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## nomore4s (27 October 2009)

Mr J said:


> I like your post. Edge simply means advantage, so we can apply that in quite a few ways when it comes to trading. The edge I've talked about is what I'd call a 'tactical' edge - the edge of specific trades, or trading strategies (positive ev). The edge you talk about is what I would call more of a 'strategic' edge. This isn't measured in trades, but the overall skill of a trader, though naturally a high strategic edge will lead to a solid tactical edge.. Would that be a fair assessment?
> 
> I think considering lifestyle is a little liberal. Anything psychological or financial I would also file under a strategic edge.
> 
> Resources would be an edge. Like Wysiwyg says, tools etc, but also data, information, access etc.




I agree that while I'm talking about an overall edge you can break each department down and try to find a small edge in each of the different areas which may help contribute to the overall edge.

I also think lifestyle is a bit liberal and I think tools is also a bit of a stretch as well.

Most traders once they get to a certain level will all be on par with the tools they are using imo, like most professions the thing separating the very best ad the rest is skill & application not equipment. Also different traders will have different needs an EOD traders requirements will be less critical & therefore different to someone who trades like TH. While tools are important I don't think they provide the edge to beat the market - but this is probably just splitting hairs.


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## nomore4s (27 October 2009)

nomore4s said:


> I agree that while I'm talking about an overall edge you can break each department down and try to find a small edge in each of the different areas which may help contribute to the overall edge.




In saying this though, imo you need to having a good understanding of the overall scheme of things before trying to break things down.

This is where alot of newbies fail imo, trying to put the cart before the horse by not really understanding what makes a profitable trader. They put a bit of money management & a trade set up together and then think that's all there is to trading, problem is when market conditions change so does the p/l sheet.


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## Wysiwyg (27 October 2009)

nomore4s said:


> While tools are important I don't think they provide the edge to beat the market - but this is probably just splitting hairs.




Yes I think you mean the `bells and whistles` don`t give an advantage. The advantage or `edge` is in (as tech/a emphasises) the application.


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## lukeaye (27 October 2009)

nomore4s said:


> This is where alot of newbies fail imo, trying to put the cart before the horse by not really understanding what makes a profitable trader. They put a bit of money management & a trade set up together and then think that's all there is to trading, problem is when market conditions change so does the p/l sheet.




But wouldnt a good strategy never change no matter what your p/l sheet?

Like if im going into a trade(s), i know what i can lose, and i know what i can gain, so regardless my strategy never changes? 

I did struggle with this concept alot. I found it hard to accept losses, even if they were little. The whole notion of accepting that im "wrong".

Like today, im in loss, but my exits have not been triggered, hard to keep them open, when i beleive the market will continue lower tomorrow, but then it may go up? Is this what you mean nomore4's?


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## Wysiwyg (27 October 2009)

lukeaye said:


> But wouldnt a good strategy never change no matter what your p/l sheet?



There was a trader named Nizar that used to be on this forum that put in place a trend following strategy. He blogged his trades, providing spreadsheet information of profit and loss. The last time I viewed the blog the account was in deficit back in September last year as the markets were sliding south. The blog isn't open any longer from what I can see and I am wondering if the trend following strategy fell down during the market decline. 
He was adamant the strategy was robust.


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## lukeaye (27 October 2009)

Wysiwyg said:


> There was a trader named Nizar that used to be on this forum that put in place a trend following strategy. He blogged his trades, providing spreadsheet information of profit and loss. The last time I viewed the blog the account was in deficit back in September last year as the markets were sliding south. The blog isn't open any longer from what I can see and I am wondering if the trend following strategy fell down during the market decline.
> He was adamant the strategy was robust.




So what he didnt have an exit strategy? Is that what your trying to say?

Just something really simple, If your strategy is buying weakness in a trend which you have defined to be a trend, then if your exit is triggered, you can't keep going into deficit? IF the trend changes your strategy doesnt have to change, just the direction of your positions?


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## nomore4s (27 October 2009)

lukeaye said:


> But wouldnt a good strategy never change no matter what your p/l sheet?
> 
> Like if im going into a trade(s), i know what i can lose, and i know what i can gain, so regardless my strategy never changes?




This is not really a strategy, this is only money management. 

What you trade, the type of set up you trade it with and when you trade it in the various cycles of the overall market is more of a strategy.



> I did struggle with this concept alot. I found it hard to accept losses, even if they were little. The whole notion of accepting that im "wrong".
> 
> Like today, im in loss, but my exits have not been triggered, hard to keep them open, when i beleive the market will continue lower tomorrow, but then it may go up? Is this what you mean nomore4's?




Again this is money & trade management at work.

What I mean is during the last 9 months or so trading breakouts and various patterns like pennants & flags and then riding the trend higher has been very profitable but in the 12 months before that this strategy was cr@p. In the next 12 months it probably won't be as easy or anywhere near as profitable so you need to optimize your trading strategy to reflect this as the market conditions become clearer.

Part of the skill of being a trader is recognising these changing conditions and positioning yourself to take advantage of it, look back through the XAO thread and see how traders like TH identified quite early there was going to be a strong rally off the bottom and of course applied that knowledge to their trading. And then look at how many bailed 1/4-1/2 through the rally missing a massive opportunity to make money because they failed to identify the current market conditions and adjust their thinking & trading to what was in front of them. TH had an edge and managed to optimise his trading to suit the conditions because of it.

While it might be a bit early yet, there are signs the market conditions are changing, we might still probe higher from here but the effort that is required to push us forward is starting to take its toll imo. I think you will find that sooner rather then later a lot of the patterns that were providing good trades will start to fail more regularly.


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## skyQuake (27 October 2009)

It means you are eligible to call your losses a 'temporary drawdown' rather than a crap trade


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## nomore4s (27 October 2009)

lukeaye said:


> So what he didnt have an exit strategy? Is that what your trying to say?
> 
> Just something really simple, If your strategy is buying weakness in a trend which you have defined to be a trend, then if your exit is triggered, you can't keep going into deficit? IF the trend changes your strategy doesnt have to change, just the direction of your positions?




Lukeaye,

Nizar had a exit strategy, his system was actually a mechanical weekly trend following system that he back & forward tested and had plenty of stats to say it was a robust system. Where nizar failed imo was he didn't recognise that the market conditions no longer suited his system and instead of turning it off and waiting for better conditions for that system he stubbornly continued to trade it.

If nizar had turned his system off & then back on even 6 months ago (not picking the exact bottom) he probably would of made a killing but as it is I'm not sure that he has made his drawdown back even with this massive rally we've had. 

This is a perfect example of knowing when to trade certain strategies & systems - eg a weekly trend following system doesn't work well during a prolonged market crash. Even with strong money management and risk strategies built into his system nizar suffered massive drawdown that while not fatal (slowly bleeding to death) will take a long time to claw back but alot of people wouldn't have been able to trade that drawdown.


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## nomore4s (27 October 2009)

skyQuake said:


> It means you are eligible to call your losses a 'temporary drawdown' rather than a crap trade




lol, how true.


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## nomore4s (27 October 2009)

lukeaye said:


> Just something really simple, If your strategy is buying weakness in a trend which you have defined to be a trend, then if your exit is triggered, you can't keep going into deficit?




Not on that trade, but on the next 10 trades you will continue to lose if the strategy doesn't suit the market conditions.



> IF the trend changes your strategy doesnt have to change, just the direction of your positions?




But then your strategy has changed.


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## skc (27 October 2009)

nomore4s said:


> This is a perfect example of knowing when to trade certain strategies & systems - eg a weekly trend following system doesn't work well during a prolonged market crash. Even with strong money management and risk strategies built into his system nizar suffered massive drawdown that while not fatal (slowly bleeding to death) will take a long time to claw back but alot of people wouldn't have been able to trade that drawdown.




Wise words. I tried to say this in the discretionary vs mechanical trading system debate. There are "macro" discretionary decisions in any mechanical system. Namely switching it off!

Mr J put it quite eloquently in classifying "strategic" vs "tactical" edge. I call them "Trader edge" vs "System edge". You can buy "system edge", but you can only acquire "trader edge" through education, experience and may be intuition.


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## nomore4s (27 October 2009)

SKC imo intuition comes from education and experience.


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## IFocus (27 October 2009)

nomore4s said:


> Not on that trade, but on the next 10 trades you will continue to lose if the strategy doesn't suit the market conditions.




The run down from Nov 2007 was a classic example where many were still thinking long or worrying about losses of being long instead of looking to short. Most missed the change in market conditions meant a change in trading method.

Same happened in the run down from the dot com to 2003.

Being able to understand when your method works and fails is critical IMHO

Good thread Nomores's I think you're on the money


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## Wysiwyg (27 October 2009)

So an edge is many things and unique to each successful trader. Only the successful trader can identify their exact `edge`.


> Where nizar failed imo was he didn't recognise that the market conditions no longer suited his system and instead of turning it off and waiting for better conditions for that system he stubbornly continued to trade it.



I would say he handled the draw down as the system allowed for it. The logic escapes me of why keep trading it in all market conditions.


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## matty2.0 (27 October 2009)

Having an Edge means you're in jail because you have been convicted of insider trading.


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## ThingyMajiggy (27 October 2009)

nomore4s said:


> the ability to beat the market consistently over a long period of time, or in other words being a complete trader who understands what makes traders profitable but most importantly can apply that understanding.




Pretty much sums it up for me. Good post nomore


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## nunthewiser (27 October 2009)

Means .to ME........ having the skills , the knowledge , the experience , the insight, the foresight, the emotional fortitude  to beat your fellow man in a game that dont take prisoners ........... You either have it or you dont ........... Reading 475 books , doing 284 courses will not teach you or give you the experience of how the market lives and breathes in a real life situation .

 Yes there are many theories that can be taken away , but its being able to put them into place and adapt to a living market that does not follow your rules

I dare say many will disagree, and thats fine...... I am not here to discuss your experiences or great knowledge of what you read.

But that is my definition of having that extra "Edge " that it takes to long term concrete your way.


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## Mr J (27 October 2009)

skc said:


> I call them "Trader edge" vs "System edge". You can buy "system edge", but you can only acquire "trader edge" through education, experience and may be intuition.




It's a good way to put it, and I think it represents me well. I have no trouble finding good trades, I'm emotionally solid, practise sound money management etc, but I lack the deep market knowledge that comes with years of experience and scrutiny. I feel it's like playing a sport and knowing how to play your position well, but not having a great understanding of the game. A good player can play his position well, but a great player just really knows the game. I guess I'm talking about the next step, rather than defining edge.


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## sammy84 (27 October 2009)

The hard part is....how to do you know when your system has lost its edge or is merely suffering a draw down?


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## lukeaye (27 October 2009)

Ok maybe what i said didn't come across the way i intended.

Im using a very basic example obviosuly, but say you have an "edge". Your edge is a trend trading strategy, and you come about this edge via expectancy from back testing. Im not saying this is the only way to get an edge, just using it as an example. 

So my strategy has worked 63% of the time for the last 30 years. I identify the trend with certain filters, my entries and exits are purely mechanical and have not changed. All of a sudden, i am starting to get an unusual amount of losses. At what point is this no longer an edge? If i sustain more losses then ever previously recorded? Or is it when i step in, in a discretionary manner, and say, this is no longer working?

I agree with your definitions of edges, obviosuly they come in many different forms. Im just trying to establish at what point you can no longer call it an edge? How Nizar could have known that it was no longer an edge? maybe it wasnt as clear cut as we think?

I mean there are very obvious situations where a strategy won't work, im not going to start trying to capture trends on a monthly basis when the market is moving directionless. 

You mentioned nomore4's that patterns will start failing more often, why will they? Not trying to be a smart a$$ i just want your views. I think the same patterns will always be tradeble just maybe on different conditions. Say one of your strategy's involves buying silver on the 23 of jan and selling on the 20 of feb. In the past it has worked 70% of the time. This pattern may not occur on this date anymore, maybe it has reverted to "improbable", but the pattern is still valid, just on a different date.

But then we can only identify this after there has been enough sample data again. If patterns fail constanly, then what hope have we? We will probably have some patterns that will never change. When i say never change, i am talking more general patterns. For example, After a particular stock has reached terminal vel in a move, and momentum begins to shift, we will get a sharp move in the opposite direction. That is probably never likely to change.

So maybe it all does come down to application, that really is the hardest part though. At what point should something be applied, or not applied anymore? Experience should play a big part? But what if experience is no longer valid, as patterns change and fail like you say?


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## nomore4s (27 October 2009)

motorway said:


> What Ever
> If it puts us at an advantage
> Then it is an Edge
> 
> ...




Motorway, I missed this post earlier for some reason. I have quoted the parts I really like - good post, thanks.


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## nomore4s (27 October 2009)

nunthewiser said:


> Yes there are many theories that can be taken away , but its being able to put them into place and adapt to a living market that does not follow your rules




I agree with this Nun, the market is a funny beast - forever changing but always the same. Learning to adapt to what it throws at you at the right time is certainly a key to trading success.



sammy84 said:


> The hard part is....how to do you know when your system has lost its edge or is merely suffering a draw down?




Well that is the skill of a great trader and a imo part of the edge a truly skillful trader has. Like Motorway said in his post:
Buying Earlier
Buying Later
Selling Earlier
Selling Later

Think of traders like FrankD & TH they always seem to be one step ahead of most other market participants.


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## nomore4s (28 October 2009)

Lukeaye,

Your post raises some good questions but tbh I can only answer most of it based on my trading methods and application of those methods and those answers might not apply to your trading.

But I will give my views on a few points.


> So my strategy has worked 63% of the time for the last 30 years. I identify the trend with certain filters, my entries and exits are purely mechanical and have not changed. All of a sudden, i am starting to get an unusual amount of losses. At what point is this no longer an edge? If i sustain more losses then ever previously recorded? Or is it when i step in, in a discretionary manner, and say, this is no longer working?




I don't trade mechanical systems but as I understand it during your testing you should be able to identify a point where the system steps outside your testing parameters and is therefore no longer valid. I do know there are mech traders that will switch a system off if they feel the market conditions a system was built for are no longer valid -  maybe someone with a stronger background in mech trading can answer this question in more depth.



> You mentioned nomore4's that patterns will start failing more often, why will they? Not trying to be a smart a$$ i just want your views.




Market conditions play a huge part in how alot of patterns play out. From memory I think you base alot of your trading around buying off support, during current market conditions this is proving to be a very profitable strategy right? Now what happens when market conditions change?

First those setups start breaking support more often and you start getting stopped out for more losers then you were - this affects your profitablity right? 
Second your winners stop returning 3-5+ r/r and start returning 1-2 r/r - this also effects your profitability right?

So now your win/loss % has dropped & your ave win rate has decreased - so what happens? Drawdown and if you continue to trade this strategy in the same way during unsuited conditions - death by 1000 cuts.



> I think the same patterns will always be tradeble just maybe on different conditions.




Maybe they can be traded on different conditions but the point is your current strategy won't work unless you identify the different conditions and optimise your trading to suit those conditions.



lukeaye said:


> So maybe it all does come down to application, that really is the hardest part though. At what point should something be applied, or not applied anymore? Experience should play a big part? But what if experience is no longer valid, as patterns change and fail like you say?




IMO it does come down to application and yes you are right it is the hardest part.

Experience is always valid imo, but remember no matter how experienced someone is they will never had faced every situation but their experience and skill gained from that experience should help them adapt to the new challenges faster then most other people - which then gives them a slight edge.

To be a good trader you need to be one step ahead of the masses (to a certain degree anyway) or riding on the coat tails of the masses depending on how you want to look at it. Having a true edge should provide this and allow you to be a step ahead constantly(although in reality this is probably never the case).


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## Mr J (28 October 2009)

> Think of traders like FrankD & TH they always seem to be one step ahead of most other market participants.




If you're not ahead, then at best you're competing, if not dead money. I wouldn't trade if I didn't think I was ahead of most participants. When I trade, my aim is to take money from others. To do that, I have to be better and/or faster.



			
				sammy84 said:
			
		

> The hard part is....how to do you know when your system has lost its edge or is merely suffering a draw down?




My philosophy is to only trade a strategy that I think exploits inherent behaviour of the market. That may sound like a load of sales talk, but we trade people, not moving averages, indicators etc, regardless of whether we realise this. I may not understand the market very well, but I understand why my strategies work extremely well, and have complete confidence in them.



			
				lukeaye said:
			
		

> How Nizar could have known that it was no longer an edge?




Well, that was possibly the weakness in his strategy. I think I would know very quickly, as I judge my strategies by how the market consistently responds to them, not by the results.



> Say one of your strategy's involves buying silver on the 23 of jan and selling on the 20 of feb. In the past it has worked 70% of the time. This pattern may not occur on this date anymore, maybe it has reverted to "improbable", but the pattern is still valid, just on a different date.




We're asking for it by making trades for such specific reasons.



> So maybe it all does come down to application, that really is the hardest part though. At what point should something be applied, or not applied anymore? Experience should play a big part? But what if experience is no longer valid, as patterns change and fail like you say?




I'm sure some here will say experience, but I believe it comes with understanding our strategy. I'm sure many traders will use anything that seems to work, but a good trader will know _why_ it works, and therefore know why it wouldn't.


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## Frank D (28 October 2009)

Find something that is proven to work. (method or system)

And then work out how to use it properly.

There’s two school of thoughts:- trade systematically every signal and
 let the market do its thing:- probability 

Or learn to read the market and optimize the method or system so that 
you are using the best of both worlds.

I think you’ll find that most profitable traders will have a proven method
 or system, but I feel that where they might be lacking is their own ability
 to be able to optimize the method. And that’s the edge.

And I think that simply comes down to experience and time in the markets.

Personally, and I’ve said this numerous times, I’m a good chart reader 
and I’ve got an eye for pre-emptive pattern recognition techniques. 

After that, let the market do its own thing.


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## nomore4s (29 October 2009)

This thread is a bit of a follow on from the Edge thread. In that thread I talked about adapting your strategies and trading to suit the market conditions.

As it now looks like we are entering a new phase of the market and I'm in the process of changing my strategy for how I will trade over the next 6 months or so, I thought it would be a good time to start a thread showing how I do this.

Before we start a disclaimer of sorts. This is purely how I address my trading processes and goals to suit my trading over the markets and time frames I trade. I'm only a mildly successful trader and these ideas aren't going to suit everyone and other traders may find they will not work for them. I welcome any feedback and other examples from other traders.

Alright lets get started.

*My strategy for the last 10-12 months* - Once I had identified a major low had been put in or was close to being in and a strong rally was probably going to happen I started buying stocks looking to capture the larger trends that would develop, this buying started in Dec09/Jan10. I documented a couple of my portfolios on my blog if anyone wants proof.

Basically I was looking for stocks that had built solid bases or had broken out of trading ranges and were beginning to trend. I then brought into those stocks using various entry triggers.
While I did very well during this period I could have done a lot better but a lack of experience cost me some $, but the experience I gained was probably worth that cost.

*New strategy of the next 6 months or so*
This strategy is based around my ongoing analysis that I have been posting in the XAO thread and if that pattern starts to fail or my outlook on how it will play out changes so will my strategy on how I trade the markets.

Now basically instead of trying to ride trends higher, I'm now going to be looking for a number of different patterns that will suit the conditions - these patterns are based on my trading & research.

1. Shorts - I don't short that often due to it being difficult to get stock to short and the fact I don't find it as profitable to short stocks for various reasons. But I will now be looking for stocks that put in lower highs by breaking support and then retesting these zones and this is where I will be looking to enter my first lot of shorts. If we do start to see a sustained down trend with the overall market I will then look for continuation patterns to enter shorts.

2. Longs - I think the first stage of this period will possibly see some choppy trading conditions which will make it difficult to trade longs, so longs will be taken sparingly and will have tight trailing stops when they are taken. Again as the market makes it's mind up as to which way it will move we might see some rallies in which we can trade longs but again a tight trailing stop will be applied.

3. General - I don't expect to make anywhere near the money I made in the last 9 months in the next 6 months and I also think I will have to work harder for it. I expect my win/loss %to stay relatively the same but my R/R to drop off by quite a bit. I also don't expect to take as many trades as what I have been taking (this is a method of reducing my risks).

4. Looking for the next phase - I will be continually monitoring the market for signs that my analysis of current market conditions is wrong or we are starting to enter a new phase of the market which I will then adapt my approach to suit those conditions.

5. Be flexible - Try to remain flexible and and adapt to the conditions, if any of the above isn't working I will not stick with just because it is my strategy - I will re-evaluate and try to apply something that will work or sit out of the market till I have conditions I can trade with more faith.


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## Wysiwyg (1 November 2009)

nomore4s said:


> *Market conditions play a huge part in how alot of patterns play out.* From memory I think you base alot of your trading around buying off support, during current market conditions this is proving to be a very profitable strategy right? Now what happens when market conditions change?
> 
> *First those setups start breaking support more often* and you start getting stopped out for more losers then you were - this affects your profitablity right?



An example is pennants and flags in an up-trending stock. The breakouts fail or the support lines are breached. Happening over the last week. Obviously the general market sentiment changes and with it most of the prospective set-ups. The bulls have squeezed quite a return out of the markets since Dec/Mar.


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## IFocus (1 November 2009)

Remember reading about Linda Bradford Raschke in Market Wizards I think and she said "if you don't know what your edge is then you don't have one"

At the time didn't know what my edge was......yep I didn't have one


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## Wysiwyg (14 November 2009)

IFocus said:


> Remember reading about Linda Bradford Raschke in Market Wizards I think and she said "if you don't know what your edge is then you don't have one"
> 
> At the time didn't know what my edge was......yep I didn't have one




And not having an edge means that any funds are in danger of being transferred to those that do have an edge. 

Exempli Gratia; the beginner/novice to the experienced/seasoned.

Securities education seminars being the caudal lure of a Death Adder.


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## kam75 (15 November 2009)

never hold losses.


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## Mr J (15 November 2009)

IFocus said:


> Remember reading about Linda Bradford Raschke in Market Wizards I think and she said "if you don't know what your edge is then you don't have one"




Reminds me of the various "if you can't spot the sucker, it's you" quotes.


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## nomore4s (16 November 2009)

kam75 said:


> never hold losses.




How does this relate to the original question?

Never holding losses is not an edge and it doesn't even come close to explaining - "What does having an "edge" actually mean?"

How about adding some substance to your post and maybe something that tells us what having an edge means to you instead of the same generic cr@p I can get out of any trading book.


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## shortlist (16 November 2009)

nomore4s said:


> How does this relate to the original question?
> 
> Never holding losses is not an edge and it doesn't even come close to explaining - "What does having an "edge" actually mean?"
> 
> How about adding some substance to your post and maybe something that tells us what having an edge means to you instead of the same generic cr@p I can get out of any trading book.




As of yet I have experience only of paper-trading, so know nothing of the feelings involved when real money is moving around, but my limited experience so far has taught me that having an edge is about taking your instincts seriously. If you read and listen a lot, you probably know more than you think you do.


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## lukeaye (16 November 2009)

shortlist said:


> As of yet I have experience only of paper-trading, so know nothing of the feelings involved when real money is moving around, but my limited experience so far has taught me that having an edge is about taking your instincts seriously. If you read and listen a lot, you probably know more than you think you do.




Reading and listening has only ever brought me undone. Personally i listen to nobody else, and reading reports just makes me want to sell out of the markets. 

With all the information that is available, it makes it hard to filter what is right and wrong. But if you think about it logically, why would anybody want "you" to succeed? The more idiots there are out there listening to misinformation, the more money i make?

Personally i listen to my analysis and some music, and nothing else. If i can't see something on the chart thats gives me a high probability set-up i dont look for other reasons to buy or sell the market.


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