Adrian Reid argues that systematic traders should not rely on a single strategy but diversify across multiple strategies, markets, and timeframes. He warns that starting with one system risks early drawdowns being misinterpreted as failure, whereas diversification leads to more stable results.
The beauty of systematic trading is you should never need to rely on one strategy. Most don't understand truly the power of diversification to multiple strategies. And so many people will insist on saying oh, I'll just trade this one system first and prove that this whole systematic trading thing works and then once I've made some money then I'll start to diversify. If that system is in sync with the market, brilliant. They'll have a good first period, then they'll diversify and then they'll have a stable portfolio and they'll have a great initial five years. But if they start and that system goes into drawdown, oh this systematic trading stuff's hard. It doesn't work. I'm waiting so long and six months later I'm still in drawdown. Hang on a minute. You're trading one system.
If you would do the diversification trade the different strategies, markets, timeframes and implement that, it would be a lot easier.
