deucy28
Registered: Feb 2011
Posts: 427 |
06-07-13 12:19 AM
HOT Short
HST Long
Closed for a scalping opportunity. PURPOSE FOR LONGER TERM PAIR TRADE IS STILL INTACT. Opportunity to get back into long term pair trade will come soon.
Pair Trading is multi-faceted for money making.
See chart for one trader's simple rationale for scalping short term quarters on the way to a longer term Dollars pair trade.
http://www.elitetrader.com/vb/showt...039#post3819039
Although this is just a scalp on the way to a bigger trade of the same pair, it is a valuable example of trading inside of an existing pair trade.
Lesson:
Scalps can be picking up frequent quarters on the way to the BIG DOLLAR. I'm NOT an avid scalper, but when the opportunity sticks a big thumb in my eye that says it is free money, I will do it.
Many pair trades develop a rhythm while waiting for the trade to mature into a nice gain. Sometimes closing out an exiting trade like I did while waiting for the big dollar gain is ok when "early" in the trade.
Another plan is to open TWO exact trades: One waiting patiently for the big pair trade to make the big money and the exact second pair opened at the same time to take advantage of scalping and used exclusively for scalping should this pair become a rhythmic oscillating spread. This way, the big money trade is not missed should the second simultaneous trade that scalps turns out to be a premature closing as the spread continues going favorably after the close of the scalp which allows the first of the two simultaneous trades take advantage of the continued favorably developing spread.
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