Funny you say that cause I did look up for a Complexity meme for this thread and … Haha yes, cardboards have multiple functions xD If it wasn’t for the chicks … we would definitely wear cardboard.
I read a couple of books from this guy. https://cmtassociation.org/presenter/ernest-chan/ After explaining all sort of models and techniques to build your own automated algorithms he proceeds to explain that we tend to look for very complex systems as a confirmation that we are doing something important. But he found out that the simplest algorithms yield the best returns. There is a lot of "complex algorithms are easier to sell" mantra in this trading business, but the ones that are profitable are the simplest, apparently.
I believe these principles can be applied to the long term investor also... Examples I have used over the years; Apple, Google, Amazon, Microsoft would have a bad/one off quarter. The market spanks them and I buy. I know that concept is very simplistic (and more things go into the decision), but the same concepts can apply to the investor's trading pattern...
Not that it matters, but that's Einstein's quote. "Everything should be made as simple as possible, but not simpler." — Einstein
Not just simplicity but simplicity with nuance. For example, you have a simple moving average cross over system, but you don't always buy the cross over. As a discretionary trader you rely on your intuition which is based on years of study of conditions to decide whether to buy. Academics declare technical analysis doesn't work but that is because all they only examine the results from mechanically buying every moving average cross over. No real trader does that.
The simpler the trading system, the robust it is. The problem is how to draw a line between simple and complex. How many max rules to define the trading system is simple enough? What I have found useful is robustness test because there is no clear line between simple and complex. Another test is replicable test. Can I share the knowledge/rules of the trading system to primary school children and they able to remember and follow on the same day?