Agreed. View anyone who tells you it's an easy trade as a huckster with something to sell you. It does require a lot of preparation and homework, and the strong stomach mentioned by Hooked2000 bears closer inspection. Pairs traders most often (though not always) add to their losers, adding additional units or "layers", as the PairCo guys refer to them, and accumulating a maximum position on a scaled-in basis. This is all well and good when you have 5 units on and it's going your way, but you will sometimes find yourself with your largest position ( or 3 largest positions ) going against you. You have to be able to stomach that as a pairs trader -- your significant losses will always be with size on. It's not uncommon to take a quick .50 winner on a new trade, while at the same time suffering a .50 loss on the day in an old position ten times as large. I don't think you need me to tell you it takes fortitude to stare that in the face. You will have a large win rate as a pairs trader -- 80% or more -- but your expectancy is all in how you manage the big, big losers that that appealing trail of small winners will lead you to.