Neutral and pairs trading

Discussion in 'Trading' started by fanews, May 12, 2011.

  1. NKNY

    NKNY


    Thats because they didn't practice good position sizing... There are many ways to trade pairs.... If your trading more then 3 to 4 % per leg your going to take hits. The trick is to trade many small positions, not fewer large ones.... Let the edge work over time... Also you need to be able to pick and backtest good pairs and keep your list fresh.
     
    #11     Jun 22, 2011
  2. bone

    bone

    If any trader blows up with a pairs trade, 1. he put no effort into statistically designing the pair correctly to begin with, and 2. he only trades for convergence. Pairs are a fantastic divergence trade.

    Can't fix stupid.
     
    #12     Jun 22, 2011