Most traders believe diversification means adding more strategies. Experienced traders eventually discover that this alone doesn’t work. You can have five profitable systems — and still suffer deep, confidence-breaking drawdowns if those systems fail at the same time. This is why, inside the Owl Bundle User Group (OBUG), we don’t start with signals or setups. We start with a harder question:
When things go wrong, do my strategies fail together — or separately?
The Hidden Risk Most Traders Miss
It’s common to hear:
“Profits are additive, drawdowns are not.”
That statement is directionally correct — but incomplete. The real issue is timing. Drawdowns are not just about how much you lose. They are about when losses occur. If multiple systems experience losses during the same window of time, portfolio drawdowns deepen rapidly — even if each system is profitable on its own. This is the risk OBUG focuses on.
What We Mean by “Non-Overlapping Systems”
In OBUG, non-overlapping does not mean:
Strategies never trade at the same time
Losses never occur
Drawdowns are eliminated
Instead, it means:
Drawdown-worsening events tend to occur at different times across strategies.
Losses still happen. But they don’t stack. That distinction is subtle — and critical.
Why This Matters More Than Entry Signals
Two portfolios can have:
Similar CAGR
Similar win rates
Similar average trade metrics
Yet behave very differently under stress.
One portfolio experiences:
Long recovery periods
Compounding psychological pressure
Capital constraints during drawdowns
The other:
Drawdowns that are shorter and shallower
Smoother equity progression
Greater ability to stay engaged through regimes
The difference is not signal quality. It’s risk timing.
What We Study Inside OBUG
Inside OBUG, we take concepts like non-overlap and test them directly:
Across multiple strategies
Over long historical windows
At the portfolio level — not trade level
We study when systems are active, when they lose, and when drawdowns worsen. This is not something you can see from a single equity curve or correlation number.
It requires:
Specialized diagnostics
Strategy-by-strategy alignment
Event-based portfolio analysis
That work — including the data, tools, and interpretation — is what we are studying in OBUG.
LOOKING AHEAD IN 2026
As we move into 2026, OBUG will continue to deepen its research into market structure, regime behavior, and portfolio-level system design, building on Dr. Ken Long’s methodology and our ongoing EdgeRater backtest studies. We invite you to join the Owl Bundle User Group and be part of an exciting new year of focused study, collaboration, and disciplined market research.
To jump-start participation for those who have not already taken it, the Applied Swing Systems Trading Home Study provides a fast and practical way to get familiar with the core terminology, concepts, and framework used throughout our weekly OBUG sessions. Because portfolio-level insights develop over time and across market regimes, many members choose a multi-month commitment to OBUG to gain the full benefit of the research. Enrollment link: HERE
The Owl Bundle User Group (OBUG) is an educational research community hosted by AbleWayTech. All content is for educational purposes only and does not constitute investment advice.