Adrian Reid explains why applying one trading system across all country markets can backfire. Signals often cluster in a single country, which defeats diversification. Test your system on individual markets first to see where it actually works before combining them.
If you apply one system to all markets with a big watch list.
You're going to be assuming that system has an index filter. You're going to be turning that system on or off for all markets at the same time. The question is, do you want to intentionally build country diversification into your portfolio? If you want to intentionally build country diversification.
Then applying.
All of the.
Applying system to all of the markets simultaneously won't force country diversification.
Because you might get all of the signals from France this week and they might be the highest ranked. But if you have a system on the France and stocks, and a system on the German stocks and a system on the Swiss stocks, then you might get a different mix. I think there's pros and cons each way and you need to test each of the markets individually to see whether the system holds up and performs well on each of those markets individually. Because if you dump it all together into a watch list and it works, you're like, okay, cool, it works. But if you tested on one stock market, one subset, you may find that actually it's terrible and the rest are good.
So I think do a bit of investigation first. Again, rather than pre decide, rather than pre deciding, do the investigation and see what the analysis tells you.
