dumtom, If you understand the basics, I would recommend that you just experiment and see what works for you. Everyone seems to have there own way of trading pairs. I am making some adjustments to my methods right now, partially because of IB's change in margin requirements. I like to trade pairs that have some good volatility and don't trend away from each other too much. I pretty much look at charts of the stocks I am considering in different time frames and pick ones that move the way I like. I then paper trade the new pair for a while, and if it looks good I start trading it with 100sh positions. After I make a little money, I up the size. I would recommend you take a similar approach. Good luck. If you have any specific questions, I would be glad to try to answer them. There are others here that probably have a lot more experience than me. Also, if you do a search, you should find a lot of info. Good luck.
Hi, I am trading future spread only but following stocks as well. I found good correlation analyses in CSI UA program and a program called McSpread (www.2hedge.com) Main reason for using futures and FX is minimum margin/cost. Regards,
If you understand trading currencies, you understand trading pairs in any vehicle. Note that by definition, there is "NO" other way to trade a currency. nitro
hi! by what criteria you trying to find a pair? as i understand from my research -correlation did not work here... how you trade a pair? seems to me-every pair have some sort of trend and trend-is definitely not your friend in pair trading)))))) in attachments some charts for you those charts build on difference of closing daily prices of pair if one higher that other, then i add it to first one, if lower-substract. about 200 days on chart. if you take a look on same charts with bigger time frame(2-4 years), you will see moves between +\-80%. what i trying to say, there is not much difference trading a pair or usual -directional way. the only good side of pair trading at my opinion-it non market directional. on opposite side-risk to get bad news on long side and good on short.(unless-you play a news on pair))))))) i'm trying to work on additional some sort of indicators to avoid and reduce risks. will be very helpful to hear any opinions and suggestions about it. everyone welcome to share)))) also-trying to work on pairs where news involved. hope it helps a bit for evebody. Thank you!
See your discussion about KLAC - AMAT Attached the statistical way, see attached JPG This is 100 KLAC against 200 AMAT since 01-01-2000 Reagrds, Gann
See your discussion about KLAC - AMAT Attached the statistical way, see attached JPG This is 100 KLAC against 200 AMAT since 01-01-2000 Reagrds, Gann 2e try as part of the JPG was missing
I had problems to upload that KLAC - AMAT backtest sheet, so here are the results: 100 KLAC against 200 AMAT Period: 1-1-2000 until Monday P/L $ 10.605 Trades: 136 Lost trades: 43 Profit trades: 93 Drawdown 1.040 This is all ex. commission and slippage Strategy is based on daily close. Regards, Gann