Most trading strategies in modern electronic trading exchanges employ more than a single trading signal, generally using at least a handful of trading signals, all the way up to hundreds of trading signals inside a single trading strategy. These trading signals interact with each other in numerous complex ways and it is often difficult to understand, analyze, and optimize these interactions. Sometimes these trading signals interact with each other through complex machine learning models, which makes it even more difficult to intuitively understand all the different interactions possible.

Similar to how we analyze trading signals over a larger search space using complex principles and methods from linear algebra, calculus, probability, and statistics, we also need a similar system for trading strategies. This system has to be capable of testing over a huge space of possible interactions between different trading signals and optimizing these interactions to find the optimal trading signal combination models. A lot of the possible techniques that can be used to optimize trading signals can also sometimes be directly used to optimize combinations of trading signals. However, the only thing to understand is that the size of the search space here is a function of how many trading signals are being combined in the final trading model.

Another consideration is the optimization method used to optimize the prediction model, which is a combination of individual trading signals. For complex methods with a lot of trading signals, this complexity can increase exponentially and become unsustainable very quickly. Sophisticated quantitative trading firms will use a combination of large cloud/cluster-computing systems, smart parallelization pipelines, and super-efficient optimization techniques to optimize their prediction models continuously with large datasets. Again, this is all in an effort to deal with changing market conditions and trading participants, and always have the optimal signals and signal combinations possible to maximize trading profitability.