Do you have an "edge"?

[yeocokent]

Thought this was  a good article that some might enjoy.

http://daytrading.about.com/od/daytradingbasics/qt/TradingEdge.htm 

[pinetree]

Comparisons are often drawn between trading and poker in that anyone can learn the rules of poker in an afternoon, but it takes much practice to get good at it.  The great players aren't great because they have some secret holy grail that no one knows about.  How could they anyway?  Everyone knows that a full house beats a flush, etc.  They're just more highly skilled and in control of their emotions.  Similarly, anyone can learn the basics of chart reading and technical analysis in a short period of time.... yet being a consistently profitable trader is another matter altogether.

I used to worry a bit about whether an edge should be kept secret... wondering if there were some things I should keep to myself lest they "stop working."  Lots of people on the internet will agree with that idea but most good traders I come across do not agree.  Don Miller has always used the poker analogy and has said many times that the traders who won't become involved in trader education for fear of losing their edge are just silly and paranoid.  His blog: http://donmillereducation.com/journal/

I went short the S&P futures near the high of day today with a relatively tight stop so we'll see if I get any afternoon downside.

[pinetree]

I'm sure Sidewinder could write quite a bit on this topic.

I saw some backtest results of a chart study some of his friends call "holy grail" and it was interesting.  In the samples they showed it seemed to generate losing trades 50% of the time (not very impressive on first glance) but still yielded meaningful profits by virtue of all the losing trades being small and the winners being of all sizes.  This is something that traders could have a hard time with if they have too much of a "need to be right" as many of us do.  I'm sure some people could use it and make good money, and others could totally screw it up.

[Depleted]

This is an interesting thread. I agree that there is no holy grail, even with Visual Analysis.  But I will say that there ae definite "conditions" which seem to repeat themselves, and if one can detect what these are, and when these occur, then a profitable system may be established. This takes lots of back testing, time, and patience, but it can be done, just stay with your gut instincts, keep good records, and listen to no one. From what I have seen, and worked with, I can say that it would seem that people are either "fooled" or "discounted with emotion" out of their money, with all the news the internet can conjure up.
With Visual Analysis, one can say that the best time to take a position is when nobody wants the stock. Easier said than done. One must master the elimination of the emotional component completely, otherwise risk being continually led to the slaughter house. I sum up a stock chart as the best possible insight into the workings of the company that an outsider can get, without being an Insider. I look at news about the stock as event markers used to justify the recent moves in the chart. This is true because all insiders have early positions before the public news is made...always.
If you can ignore the emotional attachment, but monitor and trade on the emotional attachment of others, then you can profit.
Hope this makes sense...cheers D