The point made about pairs trading was that there are a gazillion possible combinations, the idea being you can trade a product that hasn't been traded by all and sundry. I think when Mark Fisher was on he talked about short yen long ccj (cameco). Mav has had some interesting posts about this...
I don't pound my chest, because that could hurt my heart.
You might think I trade on emotion, but I am nothing but a quantitative automaton who'll eat your lunch but I don't need food to live, only price, volatility, and that is my sustenance..
I think the latter part of the question would be directed to Maverick. He made a comment a few weeks ago about a spread trade being long volatility. To be honest I never thought of it that way. I always think of options etc. when I think of vol. Maybe he can expand on why spreading not Coke vs...
Mav I do want to say thank you for sharpening my thinking about markets. I am always concerned about reversals, they are hard to catch, when they happen they are very profitable. Trust me honoring my stops is something I am really good at!:)
Lets say I got short gld on a short term A down (intraday) from 155.50 where would you take profits at using the methodology?
(This assume .72 atr x 20% or .14 for a up and a down)
It depends is acd breakout or reversion. I think the whole idea for me is to not get taken out of a trend day. It is easy now to say gold is a short. I took a scalp on gld the other day and got stopped out. No biggie on to the next trade. I tend to favor long trades so I get stopped out alot...