Why I Like Giving Other Traders an Edge
I recently saw this comment on Facebook in response to one of my postings there.
The author seems to have a hard time believing that pattern trading could be of any use if I’m “giving” it away.
Here’s the post:
First, there are a couple of things I agree with:
1) Yes, the markets are a zero-sum game in the end. What one trader wins, another loses. No argument there.
2) Jim Simons wouldn’t give his secrets away.
If you’re not familiar with the name, Mr.Simons is a billionaire hedge fund manager described as "greatest investor on Wall Street". He founded quantitative hedge fund RenaissanceTechnologies to profit from market inefficiencies with mathematical models and algorithms.
Mr. Simons is in the business of making as much money as possible for his investors. He uses highly proprietary (and specialized) mathematical models and algorithms for his trading. And since the hedge fund business is one of the most competitive in the world, any incremental advantage you have over the competition is very, very important.
What makes me different from Mr. Simons is that I’m interested in teaching others how to trade.
Of course I trade my own accounts and very successfully too – I recently made seven figures from the NASDAQ decline from a combination of put buys, short sales and inverse ETF gains.
But unlike a hedge fund manager, making money for the sake of making money isn’t the end game for me.
I love teaching!
What’s more, what I teach isn’t a collection of “nuclear secrets” like the models and algos used at RenaissanceTechnologies.
All my stuff is out in the open. In fact, there are lots of scientific studies out there that have analyzed the methodology I use day in and day out as a trader. (Hint: they prove that it works!)
Here’s a couple of those studies you can check out if you like:
So here’s what I’m getting at …
Pattern trading is timeless. I look at trends, price patterns and price action too.
Patterns are only one part of the equation. You can’t trade based on patterns alone. They’re just one part of technical analysis, not the whole thing. You also need to look at momentum, current price relative to the open, high, and low, and a bunch of other things better left said in another post.
What’s more, there are so many instruments and so many timeframes in which you can apply pattern trading that there's plenty of room for traders to get an edge without stepping on each others' toes.
So the “market” for a winning edge isn't quite as limited as my critic might think.
In the end, I teach traders a comprehensive way of looking at the markets, one that actually works. I also teach risk management, discipline and patience. These are rarer than you might think. That’s why there are many, many losing traders and only a handful of consistent winners.
In fact, teaching you to become a consistent winning trader is my goal. That consistency comes from following a proven method with good risk management day in and day out.
When traders lose, it’s almost always because they can’t or won’t follow risk management rules. They get too impatient. They switch from one method to another. Or they quit after a couple of losses without waiting for the wins to arrive.
These are bad habits I try to teach you to avoid. Consistency is the key.
So that’s my “edge” and I want it to become yours too. It’s so important.
And that’s why I have to disagree with my critic that what I offer can’t possibly work and is therefore useless. Because it really does work.
When you’re a small trader, there’s plenty of room in the “pool” to use something that works without having to keep secrets like Jim Simon.
I wouldn’t have seven-figure gains and a whole host of satisfied students if it didn’t.
If you have a question or want to stay up to date on what I’m doing in the markets, you can follow me on my social media channels here: