What is trading edge?

trading edge

A lot of traders when beginning their trading journey come across this term called ‘Trading Edge’. What exactly is it? It is not something that can be achieved by reading a trading book or by watching trading videos available on the internet.

Trading Edge combines:

1) Selection of Trade.

2) Knowing when to enter, how to manage (trade & behavior) and when to exit the trade. Besides this, when to avoid the trade you selected.

3) A good risk reward every time. It is to ensure that your net wins always counter your net losses by good margins.

4) Position sizing as per capital.

5) No emotions: greed/ fear/ FOMO.

In short, it is a combination of technical skills, money management, risk management and emotional control in action at the same time. Trading edge is something that is achieved over time when you exercise your knowledge in live markets. Just like any sport in which the more you play on the field the better skill you develop in a time period. Building a trading edge requires you to acquire knowledge from books and videos, developing emotional control, doing calculations on your capital- its allocation & distribution. At the end putting all of the above things together.

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