Too much of a good thing?

Is it really possible to have too much of a good thing?

In some cases, it definitely is, and I experienced a case of this recently.

Yesterday it was 35 degrees Celsius (95 Fahrenheit) here in Melbourne, it was a beautiful day. It was still quite warm in the evening though, so after dinner I decided I would help myself to some delicious Salted Caramel and Macadamia ice cream – it’s so good!

I served myself a generous portion and sat down to watch an episode of Narcos on Netflix.

Within a few minutes the ice cream was gone and I wanted more, so I came up with all types of reasons to justify a 2nd bowl and got busy slamming down a 2nd serve, but…

10 minutes later I started regretting it.

In my ice-cream induced euphoria I’d overdone it, and was starting to pay the price for over-indulging.

Sometimes we can fall into the same trap in trading too – especially with optimization.

While a small serve of optimization can feel good, overdo it and you could pay the price for ‘over-indulging’ when you try trading a strategy with real money.

Luckily, there are some simple but powerful steps we can take to reduce the chance of over-optimisation.

In the podcast episode with Bob Pardo from Pardo Capital, Bob shared a number of tips he’s used from almost 40 years in the industry, so we’ve created a handy checklist we imaginatively called ‘Robert Pardo’s optimization checklist‘.

The checklist contains 12 practical tips on creating robust trading strategies – tips that can help you identify if a strategy is robust or you’ve potentially ‘over-indulged’ in the optimization process.

Avoid the pains and download a free copy here.



12 January 2018

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