The principal algebra Lp of coupled nonlinear Schrödinger equations describing the propagation of polarized optical pulses and involving four-wave mixing terms is obtained in terms of the three arbitrary labelling parameters of the system of equations. This algebra is found to be five-dimensional, indicating the richness in symmetries of the system. The most general symmetry group transformation by generators of Lp is found and it is shown that this transformation preserves the boundedness of solutions, and an example of transformation of a soliton solution into a completely new soliton of a different type is presented. Moreover, it is explained how an infinite sequence of bounded solutions can thus be generated, yielding new solitons. Several other important properties of solutions and symmetry group transformations of the system are also demonstrated. As the system of Schrödinger equations under study turns out to be of Lagrange type, conservation laws associated with all variational symmetries of Lp are constructed and interpreted. Some symmetry reductions of the system are also derived.