So if i sell the feb contract and buy the march contract, I just wait until the feb contract expires and hope that the spread becomes smaller? Is this what pair trading is? Does the spread usually become smaller as the contract is about to expire?
I would ask in the other Ssf thread that was started by Eldridge who does pairs trading. Actually I did ask. Because I don't know how it works either.
Good luck. Start Small is all I will advise you at this moment. Especially monday morning opens, are such a tricky moment. I'd recommemd one or two contracts for your first attempt. Strategies are starting to form in my mind, based on the use of stop-losses as well as trailing stops, which are essentially stop-losses that ratchet themselves up to lock in gains. The basic questions are about size of moves, size of gains needed to be worth cashing in on. Wheels are slowly starting to turn in my mind, that's about as far as it's gotten so far . . .
hii, I couldn't trade today because cable was down. Did you get rid of the 2 QLGC contracts you had? It gapped up to 33.20, then down to 32.40, back up to 33.80, down to 33.00 then up to 33.40. Whoa, what a ride! Did you trade it some more?
I didn't trade today either. If I had had a sell order for $33.80 I could have gotten out with just a $10 loss. I do think the main thing is to work up a strategy of placing orders that will let you profit almost automatically. That's what I'm trying to focus on now. Creating trailing stop-loss orders that let you take profits from smaller moves, and continue gaining in larger moves.