And I thought systematic trading was supposed to remove emotion!

NexusFi · 2012-07-26T12:43:39-04:00

This becomes particularly important when basket trading more than one strategy out of the same capital account. Unless you totally silo accounts, then you'd better have a plan with how they'll calculate and enter positions based off the available capital. Totally silo'd accounting negates the advantage of basket drawdown complement.....ideally, you calculate the drawdown for anyone one strategy and hopefully, when traded together, you get some reduction in overall drawdown when trading the entire …

Discussion in Psychology and Money Management

Updated July 26, 2012

And I thought systematic trading was supposed to remove emotion!

July 26th, 2012, 12:43 PM

#11 (permalink)

monpere

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furytrader

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In the past 4 days, the system gave back HALF of the profits it had made in the past year. Half of the profits. In 4 days.
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To me, it seems this has nothing to do with emotions, or increasing size. Any system with this type of behavior is not a system I would be trading. I don't know, maybe the system only took 5 trades in the past year and in the past 4 days took 2 trades that gave back half, in which case that would be ok, but I assume that is not the case. More info would be needed to determine how robust the system is. I think one needs to find a robust system first, then start thinking about increasing size to maximize profits, etc.