Exactly, the edge is mostly just a guideline to follow in all of a persons trades. Yet it doesn't guide where to trade.
aaahh I see so it's more about the guarantee that you'll profit by your average winnings! Be the casiono, not the player.
Mmm I am still having difficulty, I have the moment were I invest in an alt thinking it might go up only to see it dumped like crazzy in the next hour. Then I emotionally sell on a low :(
Ok so experiment with small amount of money, I think I understand. Thanks!
The edge is more than a guideline, it's a traders mathematical deity.
The way I make sense of it, in my head. Is to ask myself
.. is this a casino or a gamblers trade?
If you can explain to yourself why it's a casino's trade... Then take it. Otherwise, keep looking for opportunities.
There are more than you can handle out there.
When beginners start trading they generally have the belief that they're only taking a trade to make money. But knowing the traders equation. You know you won't make money in every trade. All you can hope for as a trader is to take a 'type' of trade that will work in the long run.
You don't care about the trade in front of you, you only care about the average of the next 20 or so trades ahead of you.
In your particular example, you only saw the trade in front of you, take a step back and see the next 20 trades. You'll soon realise that you don't feel that emotional about the next trade in front of you... It's just one of twenty. You'll be better able to take advantage of the opportunities.
Lol the deity! Wow so I need to change my whole perspective on trading! There is no "one trade" that matter; It is always an average, correct?
Always be the casino, never the gambler!
That definitely describes me, I have been choosing these trade and putting all my hope into each one instead of making an average! Another difficulty is when to know to sell or when to hold!
Yeah I am starting to understand that now! Yeah, you win some you lose some. What is the best way to keep track of all your trades to make that average. You write down each one using a specific software or program?
Honestly from my experience you can win every time if you only get what you want out of the market and not to always look for that big trade that you think will make you wealthy. I'm still struggling due to trading with low capital and time constraint. For example, they say " if you can't trade with small money then you can't trade with big money " 0r vice versa l0l. That's true to a certain extent but I've noticed that Big money is way easier to trade. The hard part is knowing when to STOP trading. Over-trading is a traders WORST nightmare! And so, with small money i'm under pressure when I find my family wanting to go some where or need help with paying bills & what not, then I find myself over-trading trying to get that BIG paycheck, feel me!
But small 0r big money, you can be successful by not over-trading and taking ONLY what YOU want from the market. Say the market is poised to head up very high but you exist when you hit your set mark OR when it goes up a nice amount of pips(forex), set you STOP-LOSS@break-even. I will get it soon, I just have to have time on my side. 0nce I get my account back to a $1000, it's a wrap!
Right, So no going all in on the "big win" trade! I have low capital to actually. only 1 BTC to work with. I definitely understand.
Right a trade is a trade regardless of what you wager! I still need to learn how stop losses work a little more but I am starting to understand them now.