My own portfolio
This is Gecko.
In previous serialized articles, I explained how to read the performance of automated trading systems (EAs) from various information.
From now on, I would like to write more practically about how to select EAs.
The first step is the “portfolio.”
A portfolio (Portfolio) originally means a “place to put papers,” and is used in various fields such as “document case,” “portfolio,” and “track record.”
In the field of investing, a portfolio refers to a combination of financial instruments.
Going deeper, it means diversifying risk by combining various financial products to optimize profits.
With these basics in mind, this time I will explain the concept of a portfolio in FX with Geeko’s personal views abundantly interwoven.
First, let's brainstorm keywords with a focus on “diversification.”
- Diversification of automated trading and discretionary trading
- Diversification of trading accounts (brokers)
- Diversification of currency pairs
- Diversification of trading timeframes
- Diversification of trading hours
- Diversification of trade types
Something like that, I suppose.
Regarding the first point, the idea is whether to leave FX operation to EAs, to use discretionary trading only, or to use a hybrid that combines both.
From the perspective of “diversification,” I think the hybrid approach is advantageous, but personally I don’t think this method suits me because it requires too sophisticated capital management.
If you run an EA that eliminates emotions and mix in discretionary trading where emotions tend to intrude, you are likely to fail in position sizing.
Therefore, for future portfolios, let's limit ourselves to EA operation.
(Also because I develop EAs, to be honest...)
To be continued in the next installment.
