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thanks gehko & yobo, interesting views there. knocks, funny you say that because I looked at co-integration, correlation, etc.....and came to same conclusion if the pair produces good profits historically then It must wiggle back and forth consistently, correlation is just a good tool to...

My spreads in the energy sector are very volatile and currently at wide spreads, today was not nice, however if volatility subsides or we get a bounce in the markets they should tighten based on previous movements in the General Market. I'm currently working on new rules. I'm looking at the...

Found a good site for Pair trading information, it's actually a page full of links. http://finance.martinsewell.com/pairs-trading/ Has anyone used options for pair trading? like sell a put on the long stock & sell a call on the short stock, or buy a call & put?

Crazy day in the markets, really glad I haven't been trading the financials, AIG, FNM, FRE, LEH, MER, BAC, C have all made crazy moves lately, get caught on wrong side and ouch. Needless to say my open positions are experiencing high volatility & no exit or entry signals today. The whole...

Interesting article from 1988 on Goldman Sachs halting Index Arbitrage in their own accounts. The perception at the time was that program trading was the cause of the '87 crash. http://query.nytimes.com/gst/fullpage.html?res=940DE2DD103AF935A35751C0A96E948260&sec=&spon=&pagewanted=all

Thanks Midas, my trade sizes are small to keep the damage from such an event to a minium. Closed 2 trades today, both at a profit; Sold MBT @ 64.35 Covered TII @ 12.73 Sold IR @ 35.95 Covered ITW @ 47.67 No new trades today. Open trades: 10 Wins: 13 Losses: 0 Have a great...

I haven't booked any losses, only wins, what I meant is my open trades are currently in the red.

I received entry signals for them. Also correlation charts are in an uptrend and above 90%. Ratio charts are in a trading range and are currently around previous reversal zones.

Atm, I don't use stops, I just wait for an exit signal. I'm looking into stops and may incorprate them into my trading plan in the future. Opened 2 new trades today; Long CCI @ 33.77 Short AMT @ 38.78 Long TOL @ 25.00 Short PHM @ 16.38 Id like to thank everyone for their ongoing...

Currently down about 3800 on open trades, closed wins are offsetting them though. My open portfolio is concentrated in basic materials which have been very volatile lately, my position sizing reflects that however i'm working on setting exposure limits to sectors now. Ive noticed most of my...

Closed 2 trades today for a profit Sold GR @ 49.96 Covered COL @ 49.70 Sold HON @ 47.60 Covered LUK @ 42.03 No new trades today. Open trades: 10 Wins: 11 Losses: 0

hat8866, let me know what sector/industry your interested in & and Il do a correlation test in pairtrade finder and post the results.

Found a interesting newspaper article from 1894, the governors from the NYSE were trying to stop arbitrage trading between NYSE, Philadelphia & Boston stock exchanges. http://query.nytimes.com/mem/archive-free/pdf?_r=1&res=9D05E5D6173EEF33A25756C2A9629C94659ED7CF&oref=slogin

Closed another trade today for a profit: Sold GENZ @ 78.05 Covered BAX @ 68.28 Opened new trade today: Long LOW @ 25.65 Short HD @ 29.15 Open trades: 12 Wins: 9 Losses: 0

neveragain, ive done tests on eft's, indices etc... found high winning rate, however lower profit per trade, but I guess you could you use size and scale down as you suggest as tail risk in those spreads are almost non-existant. I think correlation is a good & simple tool to see how well two...

Interesting topic about correlation, I will try to offer something later regarding that. Closed 2 trades today at a profit; Sold PBG @ 31.46 Covered DPS @ 25.55 Sold EMR @ 44.63 Covered ABB @ 22.22 Opened 2 new trades today; Long MOS @ 87.39 Short POT @ 153.33 Long FCX @...

Thanks Pachoo, yes dazzy, I do capital balance each position thanks mschey. forsalenyc, I will most likely post results of closed trades in a spreadsheet at the end of each month. I did a backtest in pairtrade finder on small caps, mostly energy stocks, and they produce high profits. I...

I closed my ugly POT/CF trade today for a profit! Still I will be adhering to my new rules with trades like that. Sold POT @ 162.05 Covered CF @ 131.20 Couldn't find any new trades today that fit my criteria, I will work on expanding my universe this weekend. Open trades: 12 Wins: 6...

I think the trick is too make many small trades, I would limit the layering to once or twice and never expose a significant portion of my a/c to one stock, that way when the black swan event happens I still have chips to trade another day.

Thanks, no its because I use MOC orders a lot of the time to enter and exit trades, otherwise I put on trades in the last 15minutes of the trading session.