Ten Ways to Trade With an Edge

Ten Ways to Trade With an Edge

Ten Ways to Trade With an Edge An edge is an advantage that a trader has over his competitors, allowing him to generate and retain profits from other traders . There can be many types of  trading edges through risk management, psychological management, and through better trading methods.

Here are a few:

  1.  A selective trader that only trades the best set ups, trends, and stocks has the advantage of waiting for the fat pitch and not just swinging at every ball thrown his way.

  2. Simply using correct position sizing can put you in the top 10% of traders simply by not blowing out your account and staying in the game by maximizing winners and minimizing losers..

  3. Risking no more than 1% of your capital per trade brings your risk of ruin down to almost zero and allows the trader to survive losing streaks. You have the edge of being around to have a winning streak later on.

  4. Only taking trades with a risk-to-reward of 3 to 1 or better gives the opportunity to have bigger winners than losers in the long run which is needed to be profitable. Risking $1 for the potential to make $3 is an edge over those that risk $3 to make $1.

  5. Trading in the direction of the trend in your time frame gives you an edge over those losing money by fighting the trend.

  6. Having the discipline to follow a trading plan gives you an edge over those that trade based on fear and greed.

  7. Speaking of trading plans, also those that actually have a plan on how to trade and what to trade have an advantage over those that trade based on opinions.

  8. Knowing who you are as a trader and picking your defined method gives you an advantage over those that float from method to method throwing away money in losses by being a jack of all trades and master of none.

  9. A trader that trades a robust system that fits their personality has a huge advantage over those that can not handle the stress and strain of a system that does not fit them and they abandon it during losing streaks, usually their losses become the wins for the comfortable trader that sticks with their method until the winning streak begins.

  10. A trader with perseverance, passion, and love for the markets will beat a someone trying to make some quick money eventually and every time.