Combined Strategies

Discussion in 'Strategy Development' started by specialistlowe, Jul 20, 2008.

  1. I'm pretty new to strategy trading...I created some strategies that have between 60-85% success rate. The problem is each strategy only executes 10-20 times a year.

    Is there anything wrong with having alot of strategies with few trades vs a couple of strategies with many trades?

    Thank you for your help,
  2. 1) What is the ratio of average profit to average loss with your strategies?
    2) The more frequently you trade, the more stressful trading can become.
    3) You have to be willing to trade your strategies with real money and feel firsthand how you react to profit, loss and stress.
    4) You want to be sure that your multiple strategies are not too correlated to one another. Otherwise, your "multiple" startegies are really nothing more than the same strategy in duplicate.
  3. Nothing wrong with that at all.

    I would be more concerned about how you arrived at a profitable system. Backtesting? How many parameters? How far back did you test? 10-20 years? How much could "luck" have been a factor? Trading 1 symbol or a portfolio? How about drawdowns, could they have a large DD all at the same time? Many other questions too.

  4. Bo_D_


    will need a lot more info than that.

    i wouldnt have much confidence in a system that has only had 10 trades in a year, but thats just me. How consistent is the profit? Biggest D.D.? How do the systems perform when combined? Is the profit/D.D. ratio alot higher with the systems together. Do they take trades in different or same market conditions (correlation)? Are they all long, short or both? Whats the equity curve like?

    Ive got a short system that only returns 10-15% a year on average. Not that good by any means... Doesnt take alot of trades either. But the D.D. is low, and the trade expectancy is fairly good. So I'll happily take an average system that has extremely low correlation with my long systems.

    my thoughts only.