Diversifying systems

its universal fact that one system will work well in a certain type of market.

what if we were to "diversify" by running different characterized systems simultaneously...is anyone doing this? Is the diversification justififed ?


For example, diversifying totally by running multiple systems on the market

consider two breakout systems

One has straddle order @ Asian High/Low

Another has straddle order @ another period's high/low

sometime they will both make money,

one will make more during certain times,

the other will make more during certain times,

both may certainly lose money.



Or diversifying systems by matching it with appropriate currencies.

having a trend following system running on eurusd,
range trading on gbp jpy
etc.

just throwing out an idea....looking for insights im guessing thisi s not an easy question to answer.

Diversification imho is a good idea, if you have two or three robust systems you can earn money simultaneously. D. helps you spread the overall risk.

If you think about diversification it is essential to take into account correlations between pairs (or better - between systems).

Example: if you have early morning breakouts on cable and yen (GU and UJ) you are trading essentially the same move.

So take into account correlations between systems, if your systems are robust and uncorrelated all is ok - take into account also proper position sizing as 1 lot with the first system and .01 with the second is not proper.

Checking correlations between systems is not a complicated thing: if both are intraday look at periods of wins and lossses (use for example coloru green and red) - if both have reds and greens at the same time it is better to change systems. You can also use intraday and long term as a second, or intraday and scalping one, such systems are commonly uncorrelated.

On the end I want to add one more hint - I dont know your background but in the beginnings it is good to use rather long term systems with low MM (max 1% of account on single entry), and if you want to use second system on the lower scale - find one which help you improve entries with the lng term, it is (generally) far better to have a system with reward to risk (100pip/30pip) than other with (15pip/30pip)

Hope this hepls