Apologies that I've missed this question. Sure one way to do that is through rebalancing of positions. If you rebalance the positions, the volatility of the returns will be lower, and decreases the drawdowns. The caveat is that it reduces potential upside. Another way is diversification across multiple uncorrelated asset classes. Sure this one is harder operationally but it is one way. Maintain a position size equally weighted using volatility of the asset as a guideline. You want exposures that are equal across all the assets you trade.
These are some of the most straightforward techniques.
Hi Pedma. Could you also, please guide on some risk optimization guidelines to control drawdowns.
Hey!
Apologies that I've missed this question. Sure one way to do that is through rebalancing of positions. If you rebalance the positions, the volatility of the returns will be lower, and decreases the drawdowns. The caveat is that it reduces potential upside. Another way is diversification across multiple uncorrelated asset classes. Sure this one is harder operationally but it is one way. Maintain a position size equally weighted using volatility of the asset as a guideline. You want exposures that are equal across all the assets you trade.
These are some of the most straightforward techniques.