Learn Your Trading Edge and Just Trade It

Trade Your Edge

It’s been awhile since I my last trip to London and, from my recent trip, a few good things came out of it. A part from the good food and the sub-zero (°C) temperature, I successfully organised my first International MeetUp starting with one in Paddington, London. A special thanks to Minoo from Sydney, Australia who happened to be having a short holiday in London. We laughed at how two traders, both having to travel more than 6,500 miles, got to chat about trading over a drink.

The meet up was indeed fruitful as we got to exchange ideas on trading and non-trading topics. One of the topics that really struck me was on the idea of having a trading edge. In fact, this was the reason Minoo signed up to my newsletter (when he read my quote “Learn your Edge and Trade It”). I thought this is a good remainder to myself (and to everyone reading this now) on the importance and power of finding your own trading edge.

With the wrap up of a good session, I decided to share some of the discussions we had in Paddington.

Trading Your Edge

As you are aware, I was finding the missing puzzle in trading when I started and I had my own story to tell. Yes, I was looking for Trading Psychology and, to be precise, it’s not just about trading psychology but about MY OWN search for a tool for the mind. Like many traders, I read many books and watched many trading interviews. In the end, I found my new direction in trading and that was the day I read the book “Market Wizards” by Jack Schwager. The quote that really hit me was this:

To succeed as a trader, it is absolutely necessary to have an edge. You can’t win without an edge, even with the world’s greatest discipline and money management skills. If you don’t have an edge, all that money management and discipline will do for you is to guarantee that you will gradually bleed to death. Incidentally, if you don’t know what your edge is, you don’t have one.

When I created this website, I wanted readers to realise this same point. Hence, I picked the name Trade Your Edge.

How to Keep It Simple?

Because you are reading this now, I almost always advise traders to keep it simple and start your trading by first mastering one or two markets only. Similarly, start with on just one or two trading systems. In due course, you can consider building a few trading systems (4 or less only) which I shared in my BCG matrix here.

Ironically, since I moved to Asia, I ended up trading only the pullback and that became my trading system. And this was merely because of my new trading plan and daily routine in Asia.

Interestingly, during the meet up in London, Minoo shared that his mentor, a mid-30s Canadian who drives a Ferrari and lives in Dubai, only trades ONE financial instrument and that is, he only trades the E-mini S&P 500. As part of his edge, he does not hold his positions over nights.

This just goes to say that the old saying of ‘Keeping It Simple‘ still stands amazingly true. In fact, we agreed (during the meet up) that many traders get put off as soon as we explain that trading is fairly simple. But many agrees that it is the trader that makes it complicated.

Assuming that you agree with my point about keeping it simple. From that point onwards, how do you trade your edge and keep it simple? Some of you are probably still scratching your heads while reading this.

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So, here’s what I believe about trading your edge. When it comes to trading, here’s the thing that you really need to ask yourself?

 

What are the 3 things that you have learnt about trading that works BEST?

 

This is important because you have probably learnt many things about trading, some work and some don’t. Right? So why not take 5 mins right now and think about? In fact, if they work, you really don’t need to think too long about it as you should know it really well by now.

Also, make sure you can describe all of them in one sentence.

Let me try by giving you some examples the 3 best things that works for me.

  1. Trade with the Trend
  2. Know your Market VERY well.
  3. It only takes 2 mins (per chart) to spot a trade set up.

 

Be An Expert in the Best Things

Don’t get me wrong, when I said keep it simple, I don’t mean to say that it doesn’t take effort. All I’m saying is, instead of learning 10,000 things about trading, why not just learn 10? And that’s what I mean by keeping is simple.

TYE Meet Up LondonHowever, I would expect you to work very hard to make sure that you become an expert in those 10 things. On top of that, I expect you to be a Guru in the 3 things that you’ve picked. Because, when you become an expert at it, it becomes second nature to you.

 

I have never worked so hard for easy money in my life.

 

This was a quoted shared by Minoo and I thought it was brilliant. I believe it was taken from the book “Mindful Trading” by J. Rande Howel.

 

Dear Traders,

Work hard, work very hard… But only for the right reasons. Don’t be like a bulldozer trying to conquer every area in trading. It’s ok if that’s really what you want, but believe you me, it might take a life time to do. The financial market is an ocean of activities. And if you want all of it, you won’t have time to trade. With that, find what you believe works really well and make it your trading edge.

Just Trade It

The last advice for today – once you have worked hard in learning what you need to build your edge, just go take trade it. Keep it simple and don’t think too much about your trades. If your Trading Edge is correct and you have found the right trade, just take it. Since it only takes 2 mins to find a trade, placing a trade should take less time than that.

Ok, I think that’s all for now. I hope you’ll find your trading edge soon and just trade it. If you have any questions, please post them below and I’ll reply you as soon.

Meanwhile, I’ll enjoy the rest of my time here in London.

 

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