Systematic Advantage #40: Trading systems make building and testing portfolios easy
Systematic trading offers a significant advantage in simplifying the process of building and testing investment portfolios. With such a system, you can choose from various assets, set your specific strategy, and establish your parameters. Once set up, the system operates like a tireless financial advisor, efficiently managing your investments around the clock.
The real power of this approach shines through in the testing phase. After constructing your portfolio, you can conduct simulations using historical market data to see how your investments would have fared under different market conditions. This process, known as backtesting, provides insights into potential risks and returns, enabling you to adjust your strategy before committing any actual capital.
