As an active trader, there are three key factors of your strategy to which you need to pay close attention. There’s no holy grail in trading, but tweaking and maximizing these three things can get you pretty damn close to one.
We refer to these factors as the three pillars of trading performance:Pillar No. 1 – Edge
Edge is a concept that decades of trading literature have beaten to a pulp. You’ve heard it a million times:
“You need a positive edge to win long term.”
And it’s absolutely true.
In trading, edge is your ability to select trades that perform better than random.
You can think of edge as the process used to generate and execute entry and exit signals. Professional traders spend a majority of their time on this process alone.
They’re constantly asking themselves questions like:
|