When you've placed a one and only trade, the behavior of your equity is described perfectly by the behavior of your traded pair - they coincide!
What happens when you simultaneously place several trades in multiple assets? In doing so, you create synthetic assets - positions - whose economic attributes differ from standard assets.
Rather, the properties of your position are driven by:
- the relative weight of each of the component assets in the trade
- every asset’s volatility
- prevailing correlation between all ingredient assets
We assess traders for skill at building synthetic assets (positions) whose value grows with controlled risk, as measured by D-Leverage. We don't analyze individual trades in isolation - this could lead to the wrong conclusions!