After two months running a “safe” algorithm on the markets Stocktrack tanked and lost all its gains in a week. As difficult as it is, I appreciate the higher risk tolerance I have developed from it. There are no safe options in life so if we’re risking everything, everyday, why not shoot for the best possible?
Security is mostly a superstition. It does not exist in nature, nor do the children of men as a whole experience it. Avoiding danger is no safer in the long run than outright exposure. Life is either a daring adventure, or nothing. - Helen Keller
I looked back over the performance data and found if I were running an algorithm with a higher failure rate it would’ve performed 9x better than the “safe” option over the same two month period.
There is a risk-reward balance in everything, but by actively practising risk, pushing a little outside of your comfort boundaries each day you open yourself to greater rewards it brings.
Perhaps to get the home runs you need to strike-out a little more than average. Tomorrow will you regret not taking a little risk today to achieve your dreams?
Lessons, musings and notes on my journey to save the world.
Would the higher risk algorithm tanked as much as the “safe” algorithm that you are running?
Risk-reward is interesting subject.
Surprisingly no, just because of the way it was designed the “high” risk one caps daily losses but just lost more often… but working on that