What's an edge?
Its an entry point where you have a statistical advantage over the market. In other words, by entering trades only where you have an edge, you increase the odds of success over a long series of trades.
How do you get an edge?
I use technical analysis. I look for trendline support and resistance levels where the market is highly likely to reverse. By establishing a position at these important inflection points, not only do I give myself an edge but I also have a point of reference to control downside risk.
Certain types of fundamental analysis can give an investor an edge, but it takes a lot longer for that edge to play out. Using technical analysis, I know if a trade is going to work or not within hours, and even minutes in some cases.
Bottom line...
Traders must have an edge before putting money to work in the markets. Without it you're simply wishing for a positive outcome.
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