I am curious what most traders look at as far as the number of days a pair has been diverging. Are you looking for a sharp 3 day, 5 day, or 1 month separation in tight pairs or what? Also, are you looking for a pair to diverge by a certain percentage within your time frame? Thanks for any input.
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Pair Trading Strategy Journal
- Thread starter jonnysharp
- Start date
All depends on what you want for profits and how long you want to hold. Use a shorter time frame like 13 day means to swing trade pairs within a week or two. Use intraday spreads for quick scalps, use 200 day means to capture bigger profits, but your holding period will be longer.
All carry risk and there is no quick answer. But I think most traders on this board especially those that use pairtrade finder use shorter time frames.
All carry risk and there is no quick answer. But I think most traders on this board especially those that use pairtrade finder use shorter time frames.
All depends on what you want for profits and how long you want to hold. Use a shorter time frame like 13 day means to swing trade pairs within a week or two. Use intraday spreads for quick scalps, use 200 day means to capture bigger profits, but your holding period will be longer.
All carry risk and there is no quick answer. But I think most traders on this board especially those that use pairtrade finder use shorter time frames.
Thanks for responding. If I am looking at a 3-5 chart, do you ( in you opinion) think that a 5-7% divergance is enough? That is assuming a relatively volatile pair like say COG,OXY for example.
Thanks.
All carry risk and there is no quick answer. But I think most traders on this board especially those that use pairtrade finder use shorter time frames.
Thanks for responding. If I am looking at a 3-5 chart, do you ( in you opinion) think that a 5-7% divergance is enough? That is assuming a relatively volatile pair like say COG,OXY for example.
Thanks.
Quote from LPC65:
All depends on what you want for profits and how long you want to hold. Use a shorter time frame like 13 day means to swing trade pairs within a week or two. Use intraday spreads for quick scalps, use 200 day means to capture bigger profits, but your holding period will be longer.
All carry risk and there is no quick answer. But I think most traders on this board especially those that use pairtrade finder use shorter time frames.
Thanks for responding. If I am looking at a 3-5 chart, do you ( in you opinion) think that a 5-7% divergance is enough? That is assuming a relatively volatile pair like say COG,OXY for example.
I use two STD dev's from the 13 day mean and then wait for it to cross backover the mean movng average. Just keep an eye on the slope of the moving average. Steeper the slope stronger the trend.
Thanks.
Hi,
I am new to pairs trading and am currently trading using Spread betting in the UK, using IGIndex. I am however finding their spreads quite large, and was wondering what companies other people spread bet with for pairs trading?
One issue I find is that alot of SB companies don't cater for fractional pounds per point (eg. £1.78/p) so as to be able to trade a neutral pair.
Any suggestions?
Thanks
I am new to pairs trading and am currently trading using Spread betting in the UK, using IGIndex. I am however finding their spreads quite large, and was wondering what companies other people spread bet with for pairs trading?
One issue I find is that alot of SB companies don't cater for fractional pounds per point (eg. £1.78/p) so as to be able to trade a neutral pair.
Any suggestions?
Thanks
Quote from leonarda:
Hi,
I am new to pairs trading and am currently trading using Spread betting in the UK, using IGIndex. I am however finding their spreads quite large, and was wondering what companies other people spread bet with for pairs trading?
One issue I find is that alot of SB companies don't cater for fractional pounds per point (eg. £1.78/p) so as to be able to trade a neutral pair.
Any suggestions?
Thanks
Why not going to a real broker like IB for real exchange quotes, tight spreads, much cheaper commissions and real trading, Leonarda?
Quote from saico:
Why not going to a real broker like IB for real exchange quotes, tight spreads, much cheaper commissions and real trading, Leonarda?
At the moment i'm only trading very small £1000 account, to use IB who charge £6 per trade+taxes, just to be equivalent to the spread betting spread "commission" of about 0.4% I would need to trade at £1500 per stock (ie.£3000 per pair trade), hence an account of at least £10000 really, and unfortunately I don't have that sort of money yet...
Thanks for the idea anyway, hopefully when I make that sort of money I will definitely go the IB route...
I have been daytrading SPY/DIA for some time now. As you can all see for yourselves from whatever charts you use, sometimes I win, some times I lose. Fortunately, it's more win than lose. My question to the forum is how can I set up the pare trade to be executed in one mouse click in a pre-defined limit price? Any broker who allows this? Or an API that can do this?
thank you
thank you
IB has this capability it's called a combo order.Quote from daniel5198:
I have been daytrading SPY/DIA for some time now. As you can all see for yourselves from whatever charts you use, sometimes I win, some times I lose. Fortunately, it's more win than lose. My question to the forum is how can I set up the pare trade to be executed in one mouse click in a pre-defined limit price? Any broker who allows this? Or an API that can do this?
thank you
Don
Hi,
I think I read this once in one of the last 272 pages(!), but I was wondering peoples views on trading a pair where the divergence is caused by one of the stocks being a "range breakout". This is fine if the breakout fails and reverts nicely, but quite often the breakout will go a long way and most likely the paired stock is not going to follow suit. This has cost me in my latest 2 trades. So the question is, if one of the pairs has obviously broken out of a range (breakout), would you trade it?
Thanks
I think I read this once in one of the last 272 pages(!), but I was wondering peoples views on trading a pair where the divergence is caused by one of the stocks being a "range breakout". This is fine if the breakout fails and reverts nicely, but quite often the breakout will go a long way and most likely the paired stock is not going to follow suit. This has cost me in my latest 2 trades. So the question is, if one of the pairs has obviously broken out of a range (breakout), would you trade it?
Thanks