Let's play a game. Say I have a sports touting service. I call you every week; give you my picks for this week's college and pro football games. You pay me a fixed amount of money up front for this information. I tell you I have all sorts of inside information. My results are well documented throughout the industry; I rarely ever, ever lose. I am the BEST. I charge you $500 for this week's picks. I give you my college football 3 team parlay as well as my Sunday Lock of the year. As usual, I come through in flying colors. I pick every game correctly. You are amazed, but it's only week you tell yourself, let's see how I do next week. I call you once again; give you my picks and yet again, I come through and pick 4 out of 6 winners. The process repeats itself week in and week out. I keep calling, and you keep winning. You are beside yourself. You can't explain it. You tell all your friends about me, they don't believe you. I have now won 18 weeks in a row!!! You keep betting bigger and bigger. I never lose! So finally we get to the playoffs, your friends have been won over and decide to call me. I give them my picks. They bet huge. They get killed! They call you up and scream at you. You say, what are you talking about? Only then do you learn that I gave your friends the opposite picks that I gave you. You later discover that this is actually the con. That I call thousands of people every week with picks. I give one side to half the people and the other side to the other half. Every week, I only call back the winners. And every week, half my clients win. Till we get to the playoffs and I have 50 customers, yourself included, that have never seen me lose.
You see, it's very easy to get very lucky. But just like in life, rarely are things what they seem. Don't fall for it. The world is full of streaky winners. Lots of them. Ever wonder why the average person can't replicate the streaky winner? Skill and edge are not the same thing. A lot of people have skills. Few have edges. Yes, there are a lot of lucky people who have been streaky and profited by being at the right place at the right time in history. Not all people, but a lot of people. Guys that make money, make money because they either have an edge, or they are simply great traders. Usually if they don't have an edge, a trader will wish to trade the product that has the least vig or obstacle to being profitable. Edges are not learned, they are acquired. And they are very, very expensive to acquire. Skill can be learned. And again, one can make money WITHOUT an edge. But if you must trade a product with a high vig, you better get yourself some "edge". The definition of edge is something one has that others do not have. Not easy replicable. Anyone can get lower commissions. Edge and skill are not the same thing. Not even close. You cannot learn an edge. A lot of skilled traders blow up. Edge speaks for itself. There is nothing wrong with skill. Skill is very important. But you cannot convert skill to edge. Look, this is circular logic here. You say you have more skill than everyone else, hence you have an edge. So what is stopping everyone else from acquiring the skill you have thereby giving them edge? See? And round and round we go.
Not saying skill is a bad thing. Quite the contrary. Skill is not edge. No matter how many hours you spend in a batting cage, you will never be Barry Bonds. No matter how many hours you spend on the driving range, you will never be Tiger Woods. Skill and edge are NOT the same thing. First of all, if you think for a second that you could spend enough time on the links to beat Tiger Woods you are insane. Tiger Woods, Michael Jordan, etc, are born with an innate skill that one cannot just acquire on their own. Tiger was playing better golf at age 4 than most golfers as adults. This is not to say no one can beat Tiger or become better than him. But they will be BORN with that ability. It won't come from spending a few extra hours at the driving range. Technology is irrelevant unless you are going to handicap Tiger and play with the new clubs while Tiger is forced to play with the older clubs. If you compete with Tiger and use the same "clubs", Tiger will kick your ass each side of Sunday. Not much you can do about it. Someday, someone might come along that is better than Tiger. Someone that can BEAT Tiger or his records. That means someone will have to win 100 plus tournaments, whatever Tiger will have won by the end of his career, and win those tournaments playing against equal opponents using the SAME equipment. Athletes like Tiger are rare and few and far between. No amount of practice will make an average player as good as Tiger. You need above average skill to become a good trader and make good money. That is your edge! The above average part.
There are a ton of different methodologies out there regarding trading. And they all work. But for some people none of them work. Using the same methodology two people may yield completely different results. However using different methodologies two people may find similar success. There is no end-all method or solution to the markets, the key to profitability (edge) is not in the method, but the man behind the method, and his mastery of the method, in conjunction with his mastery of his own mind (psychology). In other words, skill. Maybe that’s why you don't see the successful traders going around telling everyone how they do it. The reason everyone can't just learn it is because it’s NOT easy. Trading is hard, it takes experience, and many times, it takes huge losses to learn the true skills. Not everyone has the patience, or money to put up to finally acquire these skills. Most the stuff that works in the stock market goes directly against common sense and normal psychology. If it was so easy everyone would do this and get rich! No matter how hard you practice, you won't be Tiger Woods or Barry Bonds. Just like no matter how hard you practice you probably won't be managing a few billion like Soros. But if you practice enough, you might become a very good golfer, or baseball player. Or hey, maybe you can even make pretty good living trading stocks. At least better than a school teacher. But on a side note, skilled traders blow up all the time. In many cases it's simply a black swan type event that they can do nothing about. Has nothing to do with skill. "Luck and chance happen to us all."