Search results

Johnnysharp, How do you have a pre set stop loss area for each area in case one of your trades does not go as planned?

These guys offer it. They also have some automation programs if you want to black box some of your strategies. http://www.pairtrader.com/index.php Statistical data on a few thousand pairs.

Yobo, I look for correlation of a pair as signal to look at the pair a little closer. I use a chart to determine how often the pair reverts to the mean. I subscribe to a database that does the statistical data crunching so I can spend my time trading. From the database I look at the average...

Ok guys can we get back to business? This has the potential to be a good thread.

Here is an example: (say the pair has a 85% tendency to mean revert) Example 1 (One entry Exit): short hypothetical pair 7k shares each side at a spread price of 1.0. Stop loss exit door at 1.5 Profit target .50 Risk $3,500 Profit $3,500 Example 2 (3 Layers): Short 1k @ 1.0...

It is if you add to a loser that is not part of the plan from the beginning. IMO there is no diference between putting a position on from the beginning at say 10k shares or averaging into the 10k position when you intend to risk the same amount on the trade. In fact I might even risk less since...

I like to layer as well. The key here is to break up your normal position into the number of layers. For example if my normal line is 7k per side on a few of my pairs (or the equivalent $ neutral amount) and since we are rarely perfect in our entry I might get to the full line like this...

I don't trade stock pairs during earnings, I like etf pairs for the reasons you listed, as well as pairs 2 securities of the same company, adr's, common vs b shares etc.

Pre determine a stop loss point and when your spread price hits that point take the loss and move on. Pairs trading is a game where we look for a statistical edge and exploit it. Say you flip a coin 1000 times and you make 1$ every time you flip heads, and you pay .50 every time you flip...

I trade with Bright remotely. I got my start in the business in 2000 at a firm that required not capital contribution and paid a small monthy salary plus % of the profits. So I am familiar with both sides of the prop. model, however, I have no experience with the other firm you mentioned...

Look into a prop. firm, members do not pay self employment taxes but you will still be out of pocket for health care.

I am glad to see a journal dedicated to pairs. Pair trading is one of my profitable strategies and I always look forward to hearing about another traders take on things. Good luck.

This bill rewards the shaddy characters out there that have bad credit for a reason and systematically game the system. Poor fellow..... forced by an evil bank to take several hundred thousand K. to buy and live in a house even if he has a history of not paying people back and sticking it...

Their website seems up to date.... http://www.traderdaily.com/

www.marketwatch.com. In the summary.

Most retail traders I know trade through interactive brokers. They have very low commissions. http://www.interactivebrokers.com/ibg/main.php

yobo, An adage came to mind when I read your post "the market can stay irrational longer than you can stay liquid." Adding layers is part of many mean reverting pair strategies, however, alway be careful not to get married to a trade because it "should do this" or "supposed to do that"...

Plan on 6 to 12 months of no income. If you are young and do not have enough to cover living expenses get a part time job at night. If and when you become profitable save 50% of everything you make to build a bank roll. Try to get it to between 250k - 500k before you start to buy nice things...

Many of us trade longer term timeframes as well as day trade at prop. firms. No firms that I know of restrict your from trading longer term. It is up to you. You are given more capital (leverage) with shorter time frames or heged positions due to the decreased risk. Your suggestion in theory...