Discussion in 'Strategy Development' started by ssrrkk, Feb 8, 2012.
Which is your most profitable or favorite strategy.
What's the difference between pairs and stat arb?
risk arb is a pairs strategy, but not stat arb.
similarly, buying a stock on friday to sell it monday because statistically it goes up over the weekend is stat arb but not pairs.
I would guess that stat arb is the more general and usually larger scale version of pairs. I believe in stat arb, you are dealing with a basket or porftolio of instruments rather than a simple pair and you are spending significant amounts of time figuring out how to combine those to create signals that are mean-reverting and stationary. I could be wrong and I don't claim to use these methods.
Ah, ok, thanks.
I am debating how to interpret this information once we get more votes. The method with the most votes might be the best to follow as many claim it to be the most profitable for them. On the other hand the contrarian would say avoid those like the plague, and go for the one that one no one is using...
Of course, the best is the method that is completely novel and nobody has ever heard of yet.
Ok, but stat arb and HFT both require a bit more than an elementary understanding of markets and trading. I would venture a guess that a majority on ET could not implement a decent stat arb. system let alone have the infrastructure in place to trade it...
Agreed with HFT, you would need to invest large dollars upfront for infrastructure, more than the available capital of your average ETer. However, I believe some professionals/insiders do post on ET, so I was curious.
For stat arb, I don't think it's out of the realm of ETers. I think there are many on the board who have a pretty good understanding of stats and math. One doesn't need to set up a large-scale operation to do stat arb -- just need to be a little creative, have the ability to work through mathematics, and to run numerical experiments.
All "technical", just get in and out of the trade.
Technical Analysis on the highest possible level, perfection in excellence.
I make no mistakes.
Never wanted anything else, dont need anything else, wont want anything else.
Can trade all assett classes, give me what you want, i can trade it.
I am part of the 5% who make it.
My strategy is top secret and completely unique.
I cuod tell you, but then I would have to.... you know what :eek:
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