Does anyone have any good picks for pairs? I generally trade high volume stocks, such as lly pfe. I trade accross all sectors, generally trade stocks without uptick rule for easy entry and exit lately my pairs have gotten choppy, any recommendations?
I use to trade pairs and used this website to find correlated stocks. I've posted this link so many times I'm just waiting to be accused of being associated with the site - www.impactopia.com Click on the USA link and it's easy from there.
How practical is trading the pairs of stocks. I mean the broker margin on short position should surely take a big bite off the profits. How do people work around this problem?
My personal experience was it was very difficult to trade them over the short term for a consistent profit. Putting on pairs for moves over the course of 2 - 3 months is where I found more success. I know that's more of investing that trading to most people on this site.
But you still have to pay the margin interest, right? What correlation percent are you normally looking for when choosing a pair?
I don't trade pairs anymore. But when I did, it was based on their correlation over the past 5-7 years on a weekly basis and the fundamentals that were behind them getting out of line. I can't help you with the margin cost, etc, that was handled by other people at the firm I worked for.