This Jane Street trader literally explains edge in this book.
Here's what's inside:
The author starts by explaining how the professionals and hedge funds think about trading.
He then talks about the biggest risk that faces market makers:
Adverse selection.
It's great since most people think of risk as standard (deviation.)
Adverse selection.
It's great since most people think of risk as standard (deviation.)
Liquidity is next (which is NOT volume).
And the most important chapter:
What is edge.
This is one of the best explanations I've ever read.
And the most important chapter:
What is edge.
This is one of the best explanations I've ever read.
A reason retail traders can compete is cost and capacity.
We play the game the big traders cannot.
We play the game the big traders cannot.
And finally, technology and adaption.
Super important in the age of AI.
Super important in the age of AI.
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