What if 2 strategies combined into 1?

[chichihang 0]

Hi all,

I'm a beginner and just started to learn and practice algotrading. Today I anticipate a question....

I've 2 strategies, one is Long Entry, another is a Short Entry
When I run backtesting of these 2 strategies for same period same instrument, it gives me a profit of 40% and 20% for example.

What if I combine these 2 strategies into 1? Will it give me a 60% profit??

Hope someone can answer. Thanks a lot!

[Jason Solomon 5]

I'm a newbie too, but what I've learned so far is the KISS method (Keep It Simple Stupid). The more tool and method you use the more confusing it will become. Don't overcomplicate things. When you follow a proven simple strategy and you start piling it becomes hard to figure out what is working and what isn't. You also limit the number of trades that you could execute and start missing out on possible great opportunities.

Edited June 19, 2018 by Jason Solomon
Got an other idea to add to the post

[Donald 5]

Agreed, sometimes less is more, and unfortunately 1+1 in trading is not always 2  

[Ulino 1]

It is good if you can do so. A single strategy is a better option as far as I think as it will improve your vision to took at the market. Your eye must be sharp enough to enlight upon the opportunity. Thank you for posting on the www.traderslaboratory forum. 

[divyanshisharma 2]

If the strategies are perfectly suitable for each other then only one can make profit! 

[Donald 5]

Yup, looks like we're all on the same page here.

[CrazyCzarina 17]

It doesn't need to give you a 60% profit, but yet you can try it out by combining two strategies if it works well. Being a beginner to take chance is definitely risky. 

[zdo 20]

chichihang,

I know you are still waiting years later with rapt anticipation for answers to your question. 

One simple answer is :  Run correlation studies on the returns of the two systems.

If they correlate, positively OR negatively, do NOT 'combine' them.

If the returns of the two systems  have a low correlation, jump all over it.  Overall performance may even exceed the 40 and 20% of the single system examples in the OP.

 

[CrazyCzarina 17]

You could try any strategy you want, by just utilizing it with small investments. So, practice your strategy in small investments, before you go for investing with huge money.