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Look at their financials. They seem to be getting worse and worse, but the stock keeps rising and rising. Either someone knows things I don't or the only reason the stock is going up is because people are hoping it will keep going up so they buy. Don't underestimate the power of...

This looks to me like a perfect castle in the air, if you know what I mean. It's gonna fall down eventually. Doesn't matter if it goes to $10 before it falls down or not because when it does fall down, it'll crash hard and will go way below what it's selling for right now. I really have no...

Hello, I am pretty much just a beginner but I have some "systems" in mind and I want to test them/tweak them a little. I need a software to do this. I saw screenshots from TradeStation, so I searched for it on google but it looks like you have to sign up for a brokerage account and start trading...

The point is that it's market neutral. For example, they might have gotten the same 12% even if the S&P returned -12%. Also, these guys are pure academics. They viewd the stocks as time series and that's it. I think you can make more than 12% if you include other things like EPS or something and...

These guys made a study and found a 12% return. You can download the paper at the end of the page. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=141615

So, let me get this straight please. All you do is open up an excel sheet, put the past historic prices of two stocks in there (How far back do you go?). Check the correlation (How many days/months do you check it for?), and then I guess you have a benchmark for the correlation (ie. >.9). Then...

Yes, I also thought that I'd have to pay interest at first, but apparently I don't :D. My email: To: Scottrade Customer Support Subject: Trading Say I want to short $1000 worth of stocks. I short them and get $1000 (minus the $7 comission) in my account from the proceeds. Until I buy...

I have an account with Scottrade and asked them about the interest issue. They said that they don't charge interest on shorts. I think you can't use the proceeds from shorts to buy long though so the strategy doesn't "pay for itself" as it should. stephencrowley, you forgot to answer one...

I never really took a statistics course so I'll be trying to learn. I have a few questions though: When you use the log of the prices, you use log base e not 10 right? When you do the regression between two sets of log(prices), you get an equation y = mx + b. m is the cointegration coefficient...

You sound like you know what you're talking about :D. I got "Pairs Trading" by Vidyamurthy and tried to read through it. I understand pretty much all of it, but just can't apply it. For example, to calculate the coefficient of cointegration, I need to split stock prices in two components: common...

I understand the basics of pair trading. However, there's something I can't resolve and I haven't seen it resolved in anything I read so far online. Say I want to make a pair trade with FDX and UPS. Now, I get their historical prices for one year, find the ratio of the two prices, the mean...