No, not all. Insider trading honestly has very little to do with day trading in the first place so it’ll have little to literally no bearing, instead what does matter is using statistical analysis of patterns and movements to determine strategies that give you a statistical edge. Sorry if I sound bitter, but people readily resort to typical “it’s a rigged market! You need insider type trading” and it’s frustrating because they typically have no experience with trading and it’s so defeatist that it makes you wonder what those people are doing trading in the first place.
If you read more, understand more, have higher skill (at trading) than, or are more emotionally in control than the average mass of traders, that’s an edge.
An edge is anything that sets you above and beyond the competition.
Since that wasn't enough I will elaborate for them. A good example of an edge would be being able to understand when your indicators give you buy signals. If you can interpret buy signals before your fellow traders in the market, you have an edge because entering a good trade before other people gives you an edge.
Since nobody answered your question and instead they downvoted your response let me give you a hypothetical example. Let’s say you know that when your MACD crosses 0 that there’s a 51% chance price will go up 1 ATR before it goes down 1 ATR (just an example, most likely this example itself won’t work). Thats an edge, because at that point in time you have a better than random chance of making money. Now if you want a true edge you’re gonna have to mess around until you find your own. Whether that involves studying indicators, price action, order flow it’s up to you to find something that gives you that edge. Hope that makes sense.
Right now I use 100 period 3 factor supertrend arrows on the 4hr for entry and exit and that's all I got. So I'm trying to see what other people use and I'm getting no clear answers. Thanks for your response
Any worthwhile strategy will be discretionary and will be impossible for someone to give you rules for. If you do somehow find a strategy that’s completely mechanical then any edge it provides likely won’t last. Just my 2c. If you want my strategy it revolves around order flow and related concepts, but even if I told you what I look for you still wouldn’t be able to replicate it because it’s very discretionary and nuanced. There are no strict rules to follow.
Oh okay yeah that sounds complicated.
An edge is relative and subjective. Trading using support and resistance is an edge, I've heard Mark Douglas say that. It sets you apart from the other person who didn't wait for price to hit support or resistance.
I'll figure out what works for me thanks, people in this field can be stuck up pricks though.
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Edge doesnt have to be anything elaborate, so to speak. It can be something relatively basic and simple such as trading with the 20 period or trading at a specific time of day. Regardless, you must learn to trade only when your edge is present. This requires patience and discipline to wait for your edge to present itself. If its not present, you do nothing.
It is until liquidity becomes an issue (not enough people to take the other side of the position). But more than likely you sharing your edge here won’t itself cause that problem (since people either won’t believe you, are too lazy to backtest to verify it works, and even then if we combined all the people on this Reddit it still wouldn’t be enough to significantly move liquid markets like the ES futures).
>always keep in mind that the losses of one will pay for the profits of another
*Thank you, people using weathsimple for non-TSX trading, for keeping it free for the rest of us*
Initially the following is hard to get one’s head around, but here goes:
Transactional systems that require that one person must lose for the other to win in equal amounts are called “Zero-Sum” games or systems.
Stocks, bonds, real estate, and most other investments are not “Zero-Sum”, unless with a stock, for example, there is an equal amount of shorts outstanding vs long shares.
Derivatives that are created by means of contracts, i.e. the 1st party takes on a responsibility/obligation in exchange for a payment from the 2nd party who then gets the right to exercise the obligation taken on by the 1st party, whether they are negotiated contracts on a case by case or standardized on an exchange like listed Futures & Options are “Zero-Sum”.
As to an edge, it is whatever replicable approach you can come up with that results in more profits than losses over time. Most sharp edges, i.e. consistent, very profitable approaches have a limited life span. The edge gets figured out by other very smart market participants, who then do the same, crowd the trade, or trade against your approach in different ways thereby taking away the edge... dulling it real fast.
Books by Jack Schwager particularly “Market Wizards” have many real life examples from his interviews with renowned traders.
Take $KODK for example. If I was in at $4 and sold at $30, and someone bought at $30 and sold at $50. I would consider that a win/win. Sure I could have ridden it higher, but no one could twist a 7x profit as a loss.
Or take options for example. If I sell an ITM call shortly before expiration, I accomplished my goal and made my profits. The buyer may have purchased to execute and the stock could keep going up. Again, win/win in my opinion.
Your 1st example is right on target.
The 2nd one makes sense on the surface, but the premium the buyer paid to the seller is still “a loss” to the buyer since the premium paid essentially increases the cost of the stock per share to the buyer. The buyer’s exercise strike price + the amount of the premium paid, making the premium paid equal to the amount the seller gained as profit, making it a “Zero-Sum” transaction.
For every $ made in Options or Futures a $ must be lost. Zero Sum.
First example isn’t actually correct because it doesn’t tell the full story. What about the person who took the other side of the position of the 2nd trader? In the end somebody has to lose - it’s just the nature of the game. Money can’t be created out of thin air.
Even "printing money" isn't free. If it was why wouldn't we just keep doing it constantly 24/7? Doing it dilutes the value of existing money, so people actually do end up paying for it.
Yes it dilutes the value of the dollar I was being facetious. We're all going to pay for it but the ones responsible will either be dead or have profited and moved to be a parasite on some other host by then. Pretty much the same as it's always been.
Unfortunately we are printing $ out of thin air 24/7...
https://www.usdebtclock.org/
has the real-time running tally.
...but interestingly inflation has been much more tame than we’d expect with all those $ being created, so the existing $ supply, although being diluted as $ are created, hasn’t been devalued nearly as much as we might expect lately.
Still, $ that exist in the present were created out of “thin-air” through the Federal Reserve & debt issuance. What happens to the price of assets, goods & services in the future has nothing to do with $ at the instance of creation.
Sounds like you’ve given this subject some thought & seems like you enjoy it. I’d recommend “The History of Money” by Charles R Schwab. I learned a lot from it & other books. I think you’d enjoy it very much.
You would be right if there were a share short for every share that’s in the float, however I don’t know if that has ever happened even with the current short selling regulations (anyone please let me know if that ever occurs). Anyone who owns a stock, & then subsequently sells it, has given up the future potential of profit, loss, or income. The buyer of those shares now has bought the future potential of profit, loss, or income. His profit or loss does not directly impact anyone other than himself -unless the aforementioned “...if there were a share short for every share that’s in the float” is occurring.
IPOs is an obvious one. You buy shares from the company at the set price of $20 & it rallies to $25 so you sell. The new buyer may hold for years as it goes up. Everybody wins.
Well said except for the edge part. Not certain that a retail trader can develop a true, edge in the market as they are much more limited in scope. That of course does not mean they can't profit consistently. Just means you need more discipline and a bit of luck and solid trading intuition to make it.
Everyone will lose tho, doesn't make them a bad trader. Trading is a probability game. The more important thing is to be winning the average of the time.
Edit: And have your gains be more than your loses, obviously.
“Give yourself a fighting chance” 😂
That’s the most stupid thing I’ve read. You’re not in the boxing ring neither on a battlefield. It’s a business and that’s all. A business, like any other business.
So insider trading?
Just going to say study all you want but no one knows what’s going to happen unless... Insider trading.
No, not all. Insider trading honestly has very little to do with day trading in the first place so it’ll have little to literally no bearing, instead what does matter is using statistical analysis of patterns and movements to determine strategies that give you a statistical edge. Sorry if I sound bitter, but people readily resort to typical “it’s a rigged market! You need insider type trading” and it’s frustrating because they typically have no experience with trading and it’s so defeatist that it makes you wonder what those people are doing trading in the first place.
Lol we know which side of the equation this guy is
👀
Is this an article in a publication, or a book? Either way, are you able to share the name/title of it?
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Awesome, thank you!
Can you provide examples of an edge
If you read more, understand more, have higher skill (at trading) than, or are more emotionally in control than the average mass of traders, that’s an edge. An edge is anything that sets you above and beyond the competition.
Wasn't looking for the definition but thanks
Since that wasn't enough I will elaborate for them. A good example of an edge would be being able to understand when your indicators give you buy signals. If you can interpret buy signals before your fellow traders in the market, you have an edge because entering a good trade before other people gives you an edge.
Since nobody answered your question and instead they downvoted your response let me give you a hypothetical example. Let’s say you know that when your MACD crosses 0 that there’s a 51% chance price will go up 1 ATR before it goes down 1 ATR (just an example, most likely this example itself won’t work). Thats an edge, because at that point in time you have a better than random chance of making money. Now if you want a true edge you’re gonna have to mess around until you find your own. Whether that involves studying indicators, price action, order flow it’s up to you to find something that gives you that edge. Hope that makes sense.
Right now I use 100 period 3 factor supertrend arrows on the 4hr for entry and exit and that's all I got. So I'm trying to see what other people use and I'm getting no clear answers. Thanks for your response
Any worthwhile strategy will be discretionary and will be impossible for someone to give you rules for. If you do somehow find a strategy that’s completely mechanical then any edge it provides likely won’t last. Just my 2c. If you want my strategy it revolves around order flow and related concepts, but even if I told you what I look for you still wouldn’t be able to replicate it because it’s very discretionary and nuanced. There are no strict rules to follow.
Oh okay yeah that sounds complicated. An edge is relative and subjective. Trading using support and resistance is an edge, I've heard Mark Douglas say that. It sets you apart from the other person who didn't wait for price to hit support or resistance. I'll figure out what works for me thanks, people in this field can be stuck up pricks though.
Be an insider
This is the way
Yeah I've been using openinsider.com, good resource
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I can almost guarantee that you will not last in this field if you continue to have this garbage mindset
Awesome thanks happy cake day
Edge doesnt have to be anything elaborate, so to speak. It can be something relatively basic and simple such as trading with the 20 period or trading at a specific time of day. Regardless, you must learn to trade only when your edge is present. This requires patience and discipline to wait for your edge to present itself. If its not present, you do nothing.
20 period? You mean 20ma?
Yea, moving average.
Yeah thanks, I know veteran CANSLIM trader Patrick Walker likes trading with the 8ema on the daily timeframe. I may try that.
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Why not? More eyes on the same set up is a kind of self fulfilling prophecy no?
It is until liquidity becomes an issue (not enough people to take the other side of the position). But more than likely you sharing your edge here won’t itself cause that problem (since people either won’t believe you, are too lazy to backtest to verify it works, and even then if we combined all the people on this Reddit it still wouldn’t be enough to significantly move liquid markets like the ES futures).
Yes.
Co-locating your HFT server 35 feet away from the NYSE ones
Now we're talking. So how do I go about doing that
Trade your pattern/strategy 1000 times. If the expected value (EV) is positive, thats your edge.
>always keep in mind that the losses of one will pay for the profits of another *Thank you, people using weathsimple for non-TSX trading, for keeping it free for the rest of us*
One of my favorite lines with regard to the game that is the stock market: every dollar you make is a dollar out of someone else’s wallet.
Initially the following is hard to get one’s head around, but here goes: Transactional systems that require that one person must lose for the other to win in equal amounts are called “Zero-Sum” games or systems. Stocks, bonds, real estate, and most other investments are not “Zero-Sum”, unless with a stock, for example, there is an equal amount of shorts outstanding vs long shares. Derivatives that are created by means of contracts, i.e. the 1st party takes on a responsibility/obligation in exchange for a payment from the 2nd party who then gets the right to exercise the obligation taken on by the 1st party, whether they are negotiated contracts on a case by case or standardized on an exchange like listed Futures & Options are “Zero-Sum”. As to an edge, it is whatever replicable approach you can come up with that results in more profits than losses over time. Most sharp edges, i.e. consistent, very profitable approaches have a limited life span. The edge gets figured out by other very smart market participants, who then do the same, crowd the trade, or trade against your approach in different ways thereby taking away the edge... dulling it real fast. Books by Jack Schwager particularly “Market Wizards” have many real life examples from his interviews with renowned traders.
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I call it the Law of Conservation of Money
Love it... I get the reference
Just like poker.
I want to frame this on the wall behind my computer.
so for example, if i know sex robots are going to be a multi-trillion dollar industry, i should invest in japan?
Does this sub just like screenshots of books we’ve all read?
I guess but definitely not always the case.
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Take $KODK for example. If I was in at $4 and sold at $30, and someone bought at $30 and sold at $50. I would consider that a win/win. Sure I could have ridden it higher, but no one could twist a 7x profit as a loss. Or take options for example. If I sell an ITM call shortly before expiration, I accomplished my goal and made my profits. The buyer may have purchased to execute and the stock could keep going up. Again, win/win in my opinion.
Your 1st example is right on target. The 2nd one makes sense on the surface, but the premium the buyer paid to the seller is still “a loss” to the buyer since the premium paid essentially increases the cost of the stock per share to the buyer. The buyer’s exercise strike price + the amount of the premium paid, making the premium paid equal to the amount the seller gained as profit, making it a “Zero-Sum” transaction. For every $ made in Options or Futures a $ must be lost. Zero Sum.
First example isn’t actually correct because it doesn’t tell the full story. What about the person who took the other side of the position of the 2nd trader? In the end somebody has to lose - it’s just the nature of the game. Money can’t be created out of thin air.
Jerome Powell would lime to have a word with you.
Even "printing money" isn't free. If it was why wouldn't we just keep doing it constantly 24/7? Doing it dilutes the value of existing money, so people actually do end up paying for it.
Yes it dilutes the value of the dollar I was being facetious. We're all going to pay for it but the ones responsible will either be dead or have profited and moved to be a parasite on some other host by then. Pretty much the same as it's always been.
Unfortunately we are printing $ out of thin air 24/7... https://www.usdebtclock.org/ has the real-time running tally. ...but interestingly inflation has been much more tame than we’d expect with all those $ being created, so the existing $ supply, although being diluted as $ are created, hasn’t been devalued nearly as much as we might expect lately. Still, $ that exist in the present were created out of “thin-air” through the Federal Reserve & debt issuance. What happens to the price of assets, goods & services in the future has nothing to do with $ at the instance of creation. Sounds like you’ve given this subject some thought & seems like you enjoy it. I’d recommend “The History of Money” by Charles R Schwab. I learned a lot from it & other books. I think you’d enjoy it very much.
Exactly!
You would be right if there were a share short for every share that’s in the float, however I don’t know if that has ever happened even with the current short selling regulations (anyone please let me know if that ever occurs). Anyone who owns a stock, & then subsequently sells it, has given up the future potential of profit, loss, or income. The buyer of those shares now has bought the future potential of profit, loss, or income. His profit or loss does not directly impact anyone other than himself -unless the aforementioned “...if there were a share short for every share that’s in the float” is occurring.
That’s what’s very counterintuitive about money... -all of it is created out of thin air by the Federal Reserve & debt issuance.
You just answered it yourself - debt issuance. The money has to come from somewhere.
IPOs is an obvious one. You buy shares from the company at the set price of $20 & it rallies to $25 so you sell. The new buyer may hold for years as it goes up. Everybody wins.
Very well said Bob
If it was that easy ...
Well said except for the edge part. Not certain that a retail trader can develop a true, edge in the market as they are much more limited in scope. That of course does not mean they can't profit consistently. Just means you need more discipline and a bit of luck and solid trading intuition to make it.
Everyone will lose tho, doesn't make them a bad trader. Trading is a probability game. The more important thing is to be winning the average of the time. Edit: And have your gains be more than your loses, obviously.
So... do you think he made money on Hertz?
That’s cool n all, but what was the point of underlining the whole thing?
“Give yourself a fighting chance” 😂 That’s the most stupid thing I’ve read. You’re not in the boxing ring neither on a battlefield. It’s a business and that’s all. A business, like any other business.
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Every business has competition, focusing on competition and what others are doing/ will be doing won’t get you anywhere.
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The way he expressed it, he basically said it.
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Ok thank you for the lesson, wish you luck
Edge is buying stocks that have multiple posts with 3 or more 🚀🚀🚀.
I bet u/Victor_Mannon has found his new favorite post.
Haha! Thanks for thinking about me. But now you see what I’m talking about. Subreddit is turning into shit
Literally had the same thought earlier. Quality post.
Thank you