Way of the turtle

particular market conditions? There are two major attributes in any
robust trading program: diversity and simplicity. Nature provides
the best example of how these factors increase robustness. A strong
analogy can be made between the survival ability of an ecosystem
and individual species within that system and the robustness of a
trading program.
Diversity
At the level of the ecosystem, nature does not rely on one or two
species to perform a task. It does not have only one type of preda-
tor, only one food source, only one herbivore, or only one scav-
enger to clean up the remains of the dead. Diversity is important
because it insulates the ecosystem from the effects of radical change
in the population of one of the species.
Simplicity
Complex ecosystems are more resilient, and complex species seem
to have significant advantages over simpler ones when the environ-
ment is stable. However, during times of change, complex species
are more likely to die off. At those times, the hardiest species are those
which are very simple, such as viruses and bacteria. Simple organ-
isms are hardier because they are less dependent on their specific
surroundings. That simplicity is significantly beneficial when the
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Way of the Turtle

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ecosystem is subjected to major change such as that which might
occur if a large meteor struck the earth or a large volcano eruption
caused a major drop in temperatures. When the climate changes,
dependency on the previous climate is a significant disadvantage.
Robust Organisms
There are some species that are complex but still are robust, or able
to survive in varying conditions. Those species generally developed
in climates or conditions where they were subjected to constant
change and therefore developed an ability to survive during those
changes. Those robust species serve as a model that can be used to
develop systems that are robust.
Now that we have considered the two building blocks of robust-
ness in nature—diversity and simplicity—let’s examine ways to add
them to a trading program. Simplicity can be added by minimiz-
ing the rules that create dependencies on specific market condi-
tions. Diversity can be added by trading as many markets as possible
that do not correlate with one another. It also can be added by trad-
ing many different types of systems at the same time so that no mat-
ter what market conditions the future brings, there will be some
systems in your portfolio that are performing well.