Pair for KLAC

Originally posted by dumtom
Can someone explain a bit more about this pair trading stagey? I think I get the overall jist of it but any details would be helpful. Like how do you choose pairs and so forth. Thanks

They don't call me dumtom 4 notin
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dumtom,

If you understand the basics, I would recommend that you just experiment and see what works for you. Everyone seems to have there own way of trading pairs. I am making some adjustments to my methods right now, partially because of IB's change in margin requirements. I like to trade pairs that have some good volatility and don't trend away from each other too much. I pretty much look at charts of the stocks I am considering in different time frames and pick ones that move the way I like. I then paper trade the new pair for a while, and if it looks good I start trading it with 100sh positions. After I make a little money, I up the size. I would recommend you take a similar approach. Good luck. If you have any specific questions, I would be glad to try to answer them. There are others here that probably have a lot more experience than me. Also, if you do a search, you should find a lot of info. Good luck.
 
Hi, I am trading future spread only but following stocks as well.
I found good correlation analyses in CSI UA program and a program called McSpread (www.2hedge.com)
Main reason for using futures and FX is minimum margin/cost.

Regards,
 
Originally posted by dumtom
Can someone explain a bit more about this pair trading stagey? I think I get the overall jist of it but any details would be helpful. Like how do you choose pairs and so forth. Thanks

They don't call me dumtom 4 notin
More...
If you understand trading currencies, you understand trading pairs in any vehicle. Note that by definition, there is "NO" other way to trade a currency.

nitro
 
Originally posted by Eldredge
Can anyone suggest a NAS stock to pair with KLAC? The obvious choices would be AMAT or NVLS, but I already trade them as a pair. I would like to trade KLAC, but I am having a hard time finding a good stock to pair it with. Any suggestions would be appreciated. Any other NAS pairs you like trading would be interesting to look at too. Thanks for any help.
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hi!
by what criteria you trying to find a pair?
as i understand from my research -correlation did not work here...
how you trade a pair?
seems to me-every pair have some sort of trend and trend-is definitely not your friend in pair trading))))))
in attachments some charts for you
those charts build on difference of closing daily prices of pair
if one higher that other, then i add it to first one, if lower-substract. about 200 days on chart. if you take a look on same charts with bigger time frame(2-4 years), you will see moves between +\-80%. what i trying to say, there is not much difference trading a pair or usual -directional way. the only good side of pair trading at my opinion-it non market directional. on opposite side-risk to get bad news on long side and good on short.(unless-you play a news on pair)))))))
i'm trying to work on additional some sort of indicators to avoid and reduce risks. will be very helpful to hear any opinions and suggestions about it. everyone welcome to share))))
also-trying to work on pairs where news involved.
hope it helps a bit for evebody.
Thank you!
 

Attachments

See your discussion about KLAC - AMAT
Attached the statistical way, see attached JPG
This is 100 KLAC against 200 AMAT since 01-01-2000

Reagrds,
Gann
 

Attachments

See your discussion about KLAC - AMAT
Attached the statistical way, see attached JPG
This is 100 KLAC against 200 AMAT since 01-01-2000

Reagrds,
Gann

2e try as part of the JPG was missing
 
I had problems to upload that KLAC - AMAT backtest sheet, so here are the results:
100 KLAC against 200 AMAT
Period: 1-1-2000 until Monday
P/L $ 10.605
Trades: 136
Lost trades: 43
Profit trades: 93
Drawdown 1.040

This is all ex. commission and slippage
Strategy is based on daily close.

Regards,
Gann
 
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