Continuing on from the discussion on the "Becoming competent at forex trading" thread.
I have noticed that having an edge is a statement that is thrown around quite a bit on trading forums but I have never really seen a comprehensive explanation of what an edge actually is. This is my take on it.
Most traders seem to relate an edge back to a statistical advantage due to a pattern, set up or trading method but to me a true edge runs deeper then that. IMO there are very few traders (especially ones who post on forums regularly) that have a true edge over the market - FrankD and Trembling Hand are two who come immediately to mind.
Having an true edge is everything from having a very strong understanding of how the market you trade moves, having strong trade setups with entry & exits triggers, risk, money & trade management, ability to manage watchlists and/or bring new opportunities to your attention, the ability to constantly optimise these factors and constantly adapt to current market conditions but most importantly the ability to be able to perform these tasks consistently over a long period of time.
It's all well and fine having a system or set up that has been back tested and forward tested until the cows come home thinking you have an edge but unless the trader has the ability to apply the system consistently during the right market conditions most traders will at best end up just treading water or at worst slowing bleeding to death.
Being a successful trader means being able to control and manage all these things over many different conditions for many years. This IMO is a true edge- the ability to beat the market consistently over a long period of time, or in other words being a complete trader who understands what makes traders profitable but most importantly can apply that understanding.