Diversification is the Key

[Arya Stark]

No, it's not about how many instruments we trade, it's about the how.

 

[Zerologic]

Like hatching eggs in several locations, diversification aims to maintain portfolio balance against potential risks from market dynamics. The goal of capital diversification is to increase the value of all asset classes or at least reduce risk.

 

[fargana]

I think diversification is not only about how many instruments you trade. If all positions moving same way, you not protect your account. For me, use different strategies and risk behaviour for good diversifying.

 

[Arya Stark]

The point to understand here is that diversification is done to manage the risk. But if one does not pay attention to things like correlation and position sizing, diversification won't help them much. So it is really about how you do it and not about how many instruments one can trade.

I fully agree, except that the post is not about the amount of instruments.