In the current issue of Stocks, Futures and Options Magazine, Larry Connors and David Penn discuss the three pillars of any successul stock trading strategy:

(1) Finding and sustaining an "edge";

(2) Understanding risk and protecting your positions; and

(3) Having the proper mindset and trading discipline

As defined by Connors and Penn, an "edge" is simply an advantage that you have that others don't:

"A baseball team with a Cy Young-caliber pitcher has an edge, all things considered, when playing a team with subpar hitters. In Hollywood, for example, it is said that an actor who stars in a dramatic role has an edge over an actor who stars in a comedic role when it comes to being nominated for—to say nothing of winning—an Academy Award for his or her performance, even if both actors were widely regarded as outstanding."

So what constitutes an "edge" in trading? As described in SFO Magazine, it sounds like an "edge" is more of a "system" that can reliably out-perform the market by being able to pick out patterns, trends and anomalies. However, an "edge" might also be an informational edge. As one Wall Street equity analyst once pointed out, the only equity research that is truly valuable is the research that nobody else has. Viewed in this context, the information found within the TradeKing community might also be an "edge" for individual investors looking for new trading ideas and trading setups.

What do you think: What is your "edge"?

[image: Your Trading Edge]