Take two trades: long the Nasdaq, long the S&P 500. Two ideas, two positions, diversified — right? On almost every day that matters, no. The two indices move together (their daily returns correlate above 0.9), which means when one hits its stop, the other almost certainly does too. You didn't place two 1R bets. You placed one 2R bet and told yourself otherwise.
This is the quiet killer of otherwise disciplined traders, because it hides inside good habits. Every individual position is sized correctly at 1% risk; the account still draws down 5% in a night because five “different” positions — two US indices, EUR/JPY, GBP/JPY and gold — were really two macro bets: equities and yen weakness.
The defense starts with measuring correlation instead of assuming it away. Our engine groups the traded instruments by correlation measured on ten years of daily returns, publishes those groups on the track record, and validates the whole portfolio together — so when correlated trades run at the same time and lose at the same time, that cost shows up in the published drawdown instead of being hidden by testing each market in isolation. Correlation is also grounds for removal: an instrument that adds stacked risk without paying for it gets retired by measurement, exactly as one did.
The habit to build: before adding any position, ask what already-open trade it secretly duplicates. If two positions would win together and lose together, they are one position — size accordingly.
Educational content, not financial advice. Trading involves substantial risk of loss. Figures referenced from the live track record change as the record grows — that's what makes them worth referencing.
Sigmo publishes LONG/SHORT signals with exact entry, stop and targets on the 7 instruments that survived a cost-adjusted multi-year test — every outcome recorded on the public track record, losses included. Free tier: 2 signals a day, forever. No card required.
Educational analysis, not financial advice. Trading involves substantial risk of loss.