Adrian Reid (Enlightened Stock Trading) reflects on a trading-career regret: he failed to diversify strategies early. He describes starting with a daily trend-following system on Australian stocks that grew his account from about $14,500–$15,000 to well over $400,000, but later suffered when market conditions changed. Reid advises diversifying across strategies, markets, and timeframes early to smooth equity growth and enable compounding over decades. He closes with a prompt for viewers to consider their own potential trading regrets.
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If you trade long enough, there's going to be some things that you did or some things that you didn't do that you regret. And for me, one of the things that I regret the most early in my trading career was not diversifying early enough. When I first started trading, I was trading trend following strategy on daily charts in the long term on Australian stocks. And that was great. I made a ton of money. That system did really well and it really boosted my account. Actually, you know, I ended up taking my account from $15,000 or $14,500 when I first launched that strategy to well over $400,000 before I added even a second system. And I can't tell you how much I regret that now because no one strategy makes money all the time. There's always market situations where one strategy works and another strategy doesn't. Maybe you've got a smooth trending market and that that means trend following works, but mean reversion isn't so great. Maybe you've got a more volatile market, mean reversion works, trend following is not so great, and so on. So there's different market conditions that happen all the time. Now the mistake that I made was thinking that that smooth trend that I was in, that, that smooth trending market rather in the Australian stocks at the time was going to last forever. And it didn't. And I stuck. I held onto that strategy because that strategy had made me money and I held onto it for way too long. I still trade trend following in Australian stocks because it works great long term, but it doesn't work all the time. Sometimes there's flat spots, sometimes there's drawdown. And had I learned about diversification of different strategies, different markets, different time frames earlier today, I would be dramatically better off, far more wealthy, because I would have had systems that made money in a variety of market conditions and I could have grown my account much more smoothly and consistently over time. So my biggest regret was not diversifying early enough. Now here's a question for you. What do you think your biggest trading regret is going to be? When you look at the way you're trading right now, and if you did, if you made your trading decisions the way you're currently making them for the next 10, 20 years, what do you think you might regret?
Challenging question, I know, but you want to think ahead because trading is about compounding. And compounding requires time. And in order to get the most time and the best compounding, you want to establish your diversified portfolio of strategies sooner. You don't want to take 10 years to learn to trade. You don't want to take 10 years to learn to diversify or systemize your trading or learn to back test because that time is time that you don't get. Compounding I made that mistake. I don't want you to make that mistake as well. I've still done very well out of it, but I would have done far better had I learned more quickly had I diversified sooner and smoothed my equity curve out with different strategies, different markets, different time frame. So diversify sooner, trade different markets, different strategies, different time frames and watch how much better your trading becomes and how much more confident you're going to be in your trading future. My name is Adrian Reid. This is Enlightened Stock Trading. Let me know, are you diversified enough yet or is that something you're going to regret? Comment below. Let me know what you think and I'll see you in the next video. Bye for now.
