The Trading Coach Podcast 1149 - Building A Balanced Trading Portfolio - What Trading Metric i Value Most.
Apr 15, 2025
Discover the secrets to building a balanced trading portfolio, focusing on key strategies like position sizing and equity curve evaluation. Learn why an equitable balance between returns and drawdowns is crucial for minimizing risks. The discussion uses sports analogies to reveal how diverse elements contribute to overall success. Hear about the importance of capital preservation and how a mix of stable and volatile assets can optimize returns while reducing psychological stress. Get ready to approach trading with a well-rounded mindset!
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Value Smooth Equity Curves
- A smoother equity curve with moderate returns is better than a choppy one with high returns and deep drawdowns.
- Stability allows gradual increase in position size and reduces risk, supporting long-term growth.
Wealthy Clients Prioritize Capital Safety
- Akil shared how wealthy clients rejected strategies yielding 200% ROI with 50% drawdowns because losing half their capital was too risky.
- They prioritized conserving capital over chasing the highest profits.
Balance Portfolio with Diverse Pairs
- Don't just pick your best performing pairs if they have volatile returns; combine steady and high-return pairs for balance.
- This diversification smooths overall equity curve and reduces painful drawdowns.