Ask Colin

What is your trading method's 'edge'?

I think that my methods have several edges. The most important of them are:

1. I have a complete trading plan that manages the many forms of risk that are involved in trading. The plan has a vital dimension in being essential to being able to maintain discipline or simply follow the plan.

2. My stop-loss and exit rules are very clear. The exits determine how much money you make, not the entries. Most people only ever worry about stock selection.

3. My money management rules are precise and unambiguous. No trader can long survive without good money management.

More generally, I think that I am the edge. There is simply no substitute for experience, which includes developed ways of thinking about markets. I can tell students what is important, but learning is more in the nature of a journey than a destination. It takes time to become a good trader. Most people are in too much of a hurry to put too much of their money at risk and are reluctant to take the time to become seasoned traders.