Jun 2310 min read
Warning Signs That Can Weaken an Otherwise Strong Trading Strategy
A portfolio does not usually become vulnerable because of one obvious mistake. More often, weakness develops gradually. Position sizes become slightly larger. Correlations rise unnoticed. Execution costs increase. A model that once behaved reliably begins producing less consistent results. Meanwhile, recent performance may still appear acceptable. These developments can be easy to dismiss individually. However, when several appear together, they may indicate that the portfol