YouTube video (Adrian Reid, Mar 11, 2019) advising traders to stop obsessing over which single stock or single ‘perfect’ system to trade. Reid argues that trading a diversified portfolio of simple, robust systems across multiple instruments, strategies (trend-following, mean reversion, swing, shorts) and markets yields far better risk-adjusted results than picking individual stocks or over-optimizing one system. He promotes combining systems for diversification of strategy, market, and direction and references a paid ‘Trading System Collection’ offering immediate diversification.
Have you ever found yourself asking, which stock should I buy? Or what type of system should I trade?
I just got off a coaching call, a mentoring call with a couple of clients that are in my Trader Success system program and we had a really solid conversation. I wanted to share with you because it's just so powerful. One of the mistakes a lot of traders make, and I see this on Facebook all the time, you've probably seen it yourself as well, is asking, what stock should I buy? Or what's the best system to trade? And I want to share with you that those questions are not the questions that are going to get you the best results. Because when you're thinking about what stock should I buy? You're thinking about one stock, one instrument that you're going to buy. And yeah, okay, it might make you some money if you have one good stock in your portfolio. But we all know that you need to diversify, right? If you've just got one stock in your portfolio, your whole account is going to be swung up and down depending on what happens in that account. So deciding what one stock to buy is not going to affect your performance, the performance of your trading account anywhere near as much as having a system that will trade many stocks. Because the diversification that's inherent in having a system and trading many stocks in your portfolio will dramatically improve your performance. So rather than asking, what stock should I buy? Look for a simple trading system to follow. And if a trading system is stable and robust and has a profitable edge, then following that system over time is going to make you a lot more money than trying to pick this stock or that stock. And because you're going to end up with a really volatile portfolio if you just trade individual stocks. But this lesson goes even further because a lot of people who are developing trading systems try to develop the one perfect trading system. And I often get the question, what's the best trading system? What system should I use? And now again, I want to share with you that finding the one choosing one trading system to follow is not anywhere near as powerful as combining several trading systems that use different strategies. Because you can spend months or years fine tuning and optimizing a trend following system, and it may perform really, really well. But you're not going to get anywhere near as much value from fine tuning and tweaking one system as you are from having several different systems that are simple and have a profitable edge and combining them together into a portfolio of systems. So whenever you find yourself looking at a system, trying to make it more complex to try and improve it and fine tune it and over optimize it. I want to encourage you to think, to stop, and to think, how can I simplify this and what can I combine it with to improve the overall performance of my portfolio? Because a portfolio of simple, profitable trading systems will perform far better than an individual trading system. Because individual trading systems always have peaks and troughs. You're always going to go through drawdowns. But when you combine multiple systems together, if those systems are simple and robust, the peaks and troughs, the drawdowns are going to occur at different times. And so when you combine them together into the portfolio, your performance is going to be better, far better than trading an individual system. So if you're out there and you're developing a trading system and you're trying to fine tune it and optimize it, and you've been working on it for months, it's time to stop. Because if the system is good enough to trade, you're going to get far more value by combining it with another system of a different strategy. Trend following plus mean reversion is way better than just trend following. Trend following plus mean reversion plus swing trading is better than that. And trend following plus mean reversion plus swing trading plus something on the short side is even better still. So don't spend months or years agonizing over getting the single best trading system. Instead, go for more diversification. Diversification across strategies and you will improve your portfolio's performance astronomically. And if you're a newer trader and you're asking for what stock should I buy? Then it's time to stop worrying about individual stocks and start moving your thinking towards following a trading system. Because a trading system doesn't worry about which stock it trades lots of different stocks, and that's going to give you an improvement in your portfolio. So instead of thinking about a stock, think about a system. Instead of thinking about one system, think about multiple systems and that path, that journey, you'll find that will improve your trading results astronomically. So if you're ready to improve your trading by implementing your first trading system, or take it to the next level by incorporating additional trading systems to get diversity into your portfolio. Click the link below and find out how you can do this right away. With my Trading System Collection. The trading system collection consists of a number of systems of different styles across different markets that provides you with instantaneous diversification no matter what style you're trading right now. The trading system collection contains systems that can improve your portfolio by providing diversity, diversity of strategy, diversity of markets, and diversity of direction. So if you want to improve your trading Click the link below and find out more about the Trading system collection from Enlightened Stock Trading. My name's Adrian Read. This is Enlightened Stock Trading and I'll see you on the other side. Bye for now.
What are you still doing here? Click the link below and find out about the Trading system Collection. It will change your trading future for the better. Click the link below, find out about the trading system collection and get some more diversification and improved results into your trading portfolio. Click the link below and I'll see you on the other side. Bye for now.
