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The question of an edge

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Market Wizard
Cleveland Ohio/United States
Trading Experience: Advanced
Platform: Tradestation
Broker/Data: Tradestation, DeCarley, others
Favorite Futures: futures
Posts: 2,620 since Jul 2012
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Grantx View Post
Dude: I want to try this new strategy on this instrument what do ya-all think?
Trader: Whats your statistical back tested edge?
Dude: .............

How do you reduce something so complex down to a single question like that and expect an answer? Most times it can take an entire journal and we still wont know what a traders edge is.

Can it be reduced down to a mere statistic?

Yes, it is called expectancy.

If you don't have positive expectancy, many of the other things on your list (iron clad discipline, superior money management, thousands of hours of screen time, journaling, etc) become irrelevant.

But, if you do have a positive expectancy edge, many of those items you listed DO become important. Example: with poor money management, you can easily get wiped out even with a positive expectancy system.

It all starts with positive expectancy - if you lack that, you will eventually be screwed.

Think of it like building a castle. You need a solid foundation (Positive expectancy) before building the castle (other items in your list). Because as Jimi Hendrix said "castles made of sand, fall in the sea, eventually."

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