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chichihang

What if 2 strategies combined into 1?

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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!

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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 by Jason Solomon
Got an other idea to add to the post

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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. 

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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.

 

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