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Increased or decreased risk with adding strategies and boredom etc.


Discussion in Psychology and Money Management

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nikke
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Posts: 34 since Aug 2010
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Hi!

This post is intended for those that have one or more strategies making enough trades and providing some profit.

After I got my first strategy live and churning away making profits most weeks I find it extremely hard to motivate myself to add strategies or improve the existing one, until I find some problems with it. Leading me to boredom.

I tried to code and add other strategies to have them as backup or decrease variance of returns. But instead of decreasing variance they seem to increase variance. Because the markets are so interconnected and when eg. there is sudden increased volatility all markets seem to behave bad. Like in 2008 all markets went wild, which means if you have many strategies it is very likely ALL of them will take a beating at the same time which will make the DD deeper. So risk is actually reduced by just having one active strategy.

How have you guys solved this. What do you do once you have a working strategy? Try to improve it, create backup-strategies(in case edge would die) or try to add strategies and find uncorrelated ones or something else?


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