Pair Trading Strategy Journal

Discussion in 'Journals' started by jonnysharp, Aug 18, 2008.

  1. Myshkin

    Myshkin

    In the case that you are like me and equally incapable at C++ and Malayalam, this other site has helped me immensely in finding pairs http://finviz.com/screener.ashx
    If you will be considering fundamentals at all, it is great as you can plug in all sorts of variables like perhaps relatively low p/b, p/e, PEG, market cap. with higher ROE or whatever YOU think is important for your longs and the opposite for your shorts in a particular industry then checking them on your charts and running them through your statistical formulas, if need be, to verify correlation and cointegration.
    I am in no way suggesting that it would not be useful in many ways to learn C++, but just in case you are don't have the time, this may work well enough for you, unless the good Mister Totalkeops would be into kicking down his time and effort for free (or at a greatly discounted rate for fellow ET aspirants?:)
     
    #1911     Mar 7, 2010
  2. lol, no.
    I already knew C++ and had a lot of code already built. But to start from scratch is an enormous task.
    But a good alternative may be to use Excel if one is good at that. I am sure I would find a way to get all the 124750 pairs.
     
    #1912     Mar 7, 2010
  3. Myshkin

    Myshkin

    Well, you may be able to narrow it down to 100k pairs as there probably isn't too much correlation between ADBE and ABT except that they kinda follow the SPX (and even that, ADBE much more closely follows the Qs).
    Totally man, if one can't build what sounds like your gargantuan beast of a data mine with C++, some sort of Excel spread (or PTF, if it does that) is imperative so that one can see where the spreads are real time with the right ratios. I am guessing such is relatively simple to create as even I have done it linked to esignal for the data with all sorts of colors lighting up here, there and then, greens, reds, and a little purple for variety and its chromotherapeutic benefits, it being the color of the crown chakra and my Saint Christopher medal riding on top of Lord Ganesha both seem to dig its flash, giving them a sheen equal to...
    OK, lord knows i don't want to end up in with the P&R forum profaners.
    May you kill it with the ETF pairs this week, man, and I appreciate your many posts on the thread.
     
    #1913     Mar 7, 2010
  4. Magnas

    Magnas

    Opened new trade today

    Bot DFG @ 22.79
    Sold MET @ 40.39

    M.
     
    #1914     Mar 8, 2010
  5. opened new trade today
    long dal at 12.75
    short luv at 12.78
     
    #1915     Mar 8, 2010
  6. coreed

    coreed

    New trade. NYSE Utilities:

    Bought POM @ 16.79
    Sold PNN @ 37.93


    What I like:
    Flat Ratio chart - Ratio is also decent distance from av.ratio
    Spread chart at 50d high.
    % -> Mean close to historical levels.
    Dividend capture for POM(Ex-Div today)

    What I don't:

    Nothing. All criteria are met

    Successful trading is actually quite boring.Taking the same trades week in week out.

    Applying a proven edge trade after trade.
     
    #1916     Mar 8, 2010
  7. Nice going guys, you're giving me some trading ideas too.

    Keep it up!
     
    #1917     Mar 8, 2010
  8. coreed

    coreed

    This trade also showed up on my radar. Met Life's AIG purchase
    blew me off. If the market believes strategic buy will immediately start increasing acquirer's EPS, the stock can take off. This happened with a UK stock recently - HFL.L, where the stock ran up 20% after they bought up Nationwide Auto.
     
    #1918     Mar 8, 2010
  9. Magnas

    Magnas

    Thank you coreed for the info. I have to admit, I am building my pairs portfolio from the statistic perspective only so far, so we will see how it goes.

    Regarding DFG-MET pair. Yes, this pair can get quite volatilite. I have include equity of 5 years backtest of this pair to this post. There is one bigger lost that can be seen on the equity (pair lost about 1700 USD on 10 000 USD position). But over all this pair has OK characteristic. Win ratio 80,65%, average trade 334 USD (all numbers based on 10 000 position), gain 20700 USD over 5 years (without money-management and without commissions and slip), drawdown 7.64%. So I have add this pair to my „paper money porfolio“ and will decide later if I will trade it life or not.
    M.


     
    #1919     Mar 8, 2010
  10. I just down loaded the free trial for pair-trade finder but I cant find the darn add button to add a pair..I clicked on the pair i want and went to analyize pair, just like the tutorial on youtube, but there is no "add" button.. @ 3:01 in the video http://www.youtube.com/watch?v=6AGz0m6bI2g

    help

    thanks
     
    #1920     Mar 8, 2010