Why Day Traders Often Overestimate Their Edge
Breaking News To Trading Moves by Shirish Agarwal
Episode notes
Many day traders believe they have found an edge when they may be benefiting from favourable outcomes, a market environment or a sample of trades that is too small to prove anything.
A few winning sessions can make a strategy feel reliable, but short-term results can be influenced by volatility, liquidity, news flow and randomness.
What Does A Real Trading Edge Look Like?
A trading edge is not one profitable trade, one setup or one good month. It is a repeatable advantage that produces positive results across many trades after fees, slippage and changing market conditions are included.
A genuine edge should answer:
• Why should this setup work?
• In which conditions does it perform best?
• When does it struggle?
• Is the sample size large enough?
• What is the avera ...