Have a Defined Trading Edge

I see a lot of talk on the internet about the need for a trader to develop an edge and define it. And, if I’m honest, most of what I’ve read out there is pretty alarming.

It’s little wonder why so many traders struggle to understand what an edge is and how they can develop one of their own.

So what exactly is a trading edge and why is it important?

An edge is everything about the way you trade that can help put the odds in your favor.

It’s a combination of the time frame you trade, the price action strategies you use, the key levels you’ve identified, your risk to reward ratio, and other factors. It even includes your pre- and post-trading routine.

How do you handle losses? What do you do when you win? These are all things that make up your trading edge.

Think about it like this…

What allowed Brazil to win so many World Cups in soccer (football to most of the world)?

Was it the passing? Maybe the shooting?

It was everything. Brazil had the “total package”, as they say. It was their passing, shooting, dribbling, movement of the ball, set plays and everything in between that gave them an edge over other teams.

Your trading is no different.

Although there are dozens of factors that make up your edge, you don’t have to master all of them at once. Nor do you have to master all of them to start putting the odds in your favor.

It’s better to master one set of factors and then slowly expand to others to further define your edge. Not only is this a natural progression, it’s the preferred way to learn.

Have you heard the saying, “jack of all trades, master of none”?

If you try to master too many of these factors at once, you’re setting yourself up to become good (not great) at a lot of things. That isn’t what we want.

Instead, master one thing at a time. For example, become an expert at identifying key levels. Then expand your skill set by learning how to determine trend strength. After that, set your focus on learning about pin bars.

Those three things are all you need to witness a rise in your profit curve. Continue to expand your skill set in this manner and soon you will have a trading edge of your own.

The key is to only tackle one or two factors (at most) at a time. Using a slow and steady approach will get you on the road to becoming a successful Forex trader in no time.