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Correlation just give you some kind of protection against market moves - Market Neutural

Hi, thetraderprofit It’s interesting, you mentioned 5 years period. It also seems that Neutural Al uses www.pairstrading.com for his analysis. In fact I back tested exact the same strategy www.pairstrading.com seem to be suggesting for 5 years back – since 1998, so I can say, you would be...

It's coming :)

What is your profit objective? FNM/FRE could give you a few percents here and there. I’m not in a trade if I don’t expect in return at least 10%. And it pays off. On 5400$ account I’m up 16 percents for the year (including commissions - 40$/pair on datek). My average position is about 1200$.

Hi, all. It looks like pairs trading model might do much better then combined with ADX indicator. I’d like to back test it. Formula for ADX is pretty simple for a stock. However, what are High and Low for a pair? Obviously, they could not be derived from the Highs and Lows of 2 stocks that...

There is a formula for correlation for any 2 functions. It’s pure mathematics. This formula is not very complicated (no integrals or differentials involved) but not the easy one either. You can search for it on the Internet. That’s not the point. The point is –what functions you use for...

If there are 2 functions (in our case 2 stocks) then the best way to find out if the functions related to each other is to find correlation between them (that’s mathematics). You of course may try to find correlation between secondary functions and in some cases the result will be close. For...