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Process to Find Your Stock Market Trading Edge (Advantage)

September 23rd, 2014

Everyone should have a trading edge when trading in the stock market, and I want to share with you the process you need to go through to get this trading edge...

Pareto’s Principle

I'm going to use the Pareto principle (or 80-20 rule) as an example to fine tune the outline I want to get across. This principle states that 80% of your results come from 20% of your effort.

This principle can be applied to many areas of life. If you're looking at a large corporation, for example, 20% of that company's lead employees with drive 80% of the company's work.

Same goes for drawing a portrait of a face – 80% of the resulting portrait will come from only 20% of the sketch (you can see the face through the outline alone). There will be a lot of additional work: shading, coloring, etc., but the general layout is evident after the sketch.

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If you know and understand this concept, you will also understand the process behind finding your trading edge.

Trading Edge

Let's start with a box. This box represents 100% of what you're currently studying…

The beginning box is 100% of your effort – you may focus on stocks, bonds, futures, etc. As you fine tune this box, you may begin to specialize in a certain category (the 20%).

You now make that 20% bigger; it is your new 100%. In this new box, let's say you choose stocks. You can be a day-trader, a swing-trader, a long-term investor, etc. If you choose swing-trading, you take 20% of that and make it bigger – your new 100%.

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As you focus on swing-trading, you may then zero in on the leaders of these kinds of stocks. The process continues on like this...

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The process creates constant fine tuning which leads to finding your trading edge.

What Box Are You In?

Are you in the initial box? Are you doing options, stocks, etc.?

If you're unsure, you are still in the initial box. If you dig deeper into your 20%, you will continue fine tuning and find your trading edge. Using Pareto's principle, you can become a professional and/or successful in certain areas!

Author: Sasha Evdakov

Sasha is the creator of the Tradersfly and Rise2Learn. He focuses on high-level education speaking at events, writing books, and publishing video courses on business development, internet marketing, finance, and personal growth.

I'm Sasha, an educational entrepreneur and a stock trader. In addition to running my own online businesses, I also enjoy trading stocks and helping the individual investor understand the stock market. Let me share with you some techniques & concepts that I used over the last 10+ years to give you that edge in the market. Learn More

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This website and content is for information purposes only as Rise2Learn, TradersFly, and Sasha Evdakov are NOT registered as a securities broker-dealer nor an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Rise2Learn, TradersFly, and Sasha Evdakov cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Rise2Learn, TradersFly, and Sasha Evdakov in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Rise2Learn, TradersFly, and Sasha Evdakov accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.