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Charts of Note
- Thread starter darkhorse
- Start date
Quote from IrisPairsGuy:
The only trade I see [saw] here (if any) was BA short / HON long on 3-7 ......
I didn't trade BA for the last couple days (I like it vs GD) due to news on Thursday..it was auto omitted..but that [your BA long] vs HON [short] still turned out to be a nice trade.
Thank you. And thank you for your honesty. It is funny you would have had the long and the short reversed of my advisory. But perhaps not. We use different different styles of pairs trading. A couple of days after my advisory posted, the action started and quite frankly the stock action very well could have gone your way rather than mine at that early stage. Stock plots go against me more often than for me at the opening of my trades, at least for a little while. I typically open in front of a locomotive baring down on me and occasionally (hopefully having the opportunity) will even add (a layer) to the opening position. I open based on a stretched rubber band, and the stretching can continue after my open. I believe in my open more times than not after my opening gets into loss territory after re-checking and affirming my conviction to open when I did. If my open position grows into additional unbooked loss , the rubber band is that much more stretched from my re-affirmed opening point, and I am that much better positioned to increase the ante with another layer at some point. If the opening was good, it now has become a great opportunity to add at this now better plot posture. This is not a mad or desperate gamble, but a high probability opportunity to take advantage, as you are aware in pairs trading.
It is still early in this plotting and can be a long time in playing out. I don't necessarily feel affirmed due to an early, small drama of plot action. Your calculation can possibly play out in this early stage. But with maturity, I believe in which stock I assigned a long and which a short. My trades/advisories are for those willing to take something longer than a real short trade. This is especially true when hunting for the big gains that come with additional layers added.
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=3757101>
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Quote from CoolTraderDude:
Hi...
What is your thinking behind this trade...? Just curious to know why you picked CVX as the short and XOM as the long.
If a picture is worth a thousand words, then my advisories on this thread--Charts of Note-- with posted charts since Aug 1 2012 will reveal a very obvious theme running through each posted pair advisory.
I try to keep text I post about charts on this thread minimal and usually posted on charts themselves.
If you want a broader background understanding of this chart advisory and others like them I posted at this thread Charts of Note, I refer you to the following link at another thread. It is about stock pair trading. My advisories are driven by a difference from the conventional pair trading strategy.
http://www.elitetrader.com/vb/showthread.php?s=&postid=3760022#post3760022