These two traders represent the difference in looking at building your portfolio based on your risk level first, or by building your portfolio based on your performance goals.

Trader A took the time to investigate low risk systems and built a portfolio with three strategies and a smooth equity curve.

Trader B on the other hand targeted high performance systems with disregard to risk.

If trader B would have identified systems with a higher risk adjusted reward, in effect he would have created a portfolio with lower downside risk.

Take for example if trader B had applied more thought to the process and decided to trade only systems with a risk adjusted reward of 3.5 or higher, but still wanted five systems for diversification, he would have decided on these systems instead.

Putting them into his portfolio and running a test based on 10K lots size, this has dropped his leverage substantially to 14:1 from 27:1 for better returns.

This now gives the trader the choice to keep the portfolio at lower leverage or increase the portfolio to maximize his potential returns on his account.

Back to portfolio tab and put in the five systems:

Plotting the Graph:

In effect Trader B has created a portfolio with lower leverage, lower downside risk with similar returns using the risk adjusted ratio effectively.

The portfolio curve plotting function allows traders to design and test numerous portfolios to suit their requirements.

We hope we have demonstrated that outright performance is not the complete yardstick to measure the effectiveness of a system, but taking other key statistics into consideration will allow you to construct a portfolio based on real trade history.

This flexibility allows the client to continue testing until they have designed a portfolio that fulfills all their investment goals.