The Most Important Step To Becoming a Better DIY Investor

by | May 16, 2017 | Systematic Trading

Since my early twenties, I have been a DIY investor as I find investing to be such a thought provoking field. For the most part, I have been a rules-based investor choosing systematic trading which is typical of an engineer.

Throughout the years, I have always sought ways to improve my investing. In my home office, perhaps just like yours, are a number of investing books. I have many of the classics but most are about systematic trading. While driving, I listen to a variety of audio podcasts but the bias is definitely tilted towards investing and finance.

There is education to be had through books and podcasts but, for me, there is something else that has been formative in leading to the investing style that I now engage in and am very comfortable with. The most important step for me has been publishing the results of my trading system here on this site. Having your own portfolio equity curve unfold over time in front of you is an absolutely humbling experience but it is instrumental to an investor’s skill development. Publishing your trading performance will greatly assist you in dealing with the emotions of being an investor.  You learn not to be overconfident after a period of superior performance because “it too shall pass”. Poor performance is instructive in that it may teach you that your trading strategy is need of a tune up. A volatile equity curve may be just what you need to tweak your trading system such that it matches your personality (been there, done that).

My choice of publishing my trading performance has been Collective2 where I enter trades that match those in my personal accounts but are scaled for the different account size on Collective2. C2 was designed for futures traders more so than equity traders but it is the best I have found. If you are a DIY investor and are not already publishing your results, my suggestion would be to start a blog and publish your trading performance monthly. You don’t have to publicize your blog – it can be for your eyes only. If my experience is any indicator, over time seeing your equity curve will likely lead you down a path of finding ways to improve your trading performance and match your trading style to your personality.

Happy investing.