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Optimal number of algo models for a single instrument

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San Diego, USA
 
Trading Experience: Intermediate
Platform: MC
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Posts: 48 since Aug 2016
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Optimal number of algo models for a single instrument

Hi all,

Is there an optimal number of strategies that one should trade per a single instrument? Clearly, some strategies are trend following, others mean reversion. But as you add more algos to a single instrument, it appears that they become more curve fitted overall and more impacted by the past noise, which is always a part of optimized model parameters (despite the fact that, as you increase algos count for a single instrument, you add algos that have negative correlation to other strategies).

So, is there a rule of thumb that performs best and has least past noise for the algos count for a single instrument, ie 2 trend following + 2 mean reversions, or smth like that?

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