Pairs Trading

I have no idea who GGSAE is I've never met or spoke to Don Bright and I am someone who has no idea why buying weak stocks and shorting strong ones works it makes no sense to me, and after many many years as a successful trend trader I can't bring myself to do it. I don't understand all of the fancy mathematical technical reasons why it does or doesn't work, but the bottom line is I see guys making 5 and 6 figures a month doing it in the prop shop I work at just day trading pairs. Are they getting leverage yes but there still making 3-8% a month on there buying power. Guys that have gone years without making any money are doing great with it while the trend traders like me who cut there losers and let there winners run are getting nowhere. For example Citibank today earnings high volume breakout after 10:00 strong market a perfect setup for a day trading trend guy like me. Guess what didn't work closed well off it's high never broke higher after 10:15. Maybe all of the pair guys are coming in and knocking it down by shorting it and buying other financials. Things like this are happening on the long and short side every day. Maybe it will stop working soon who knows. But the bottom line is it's working now anyone that says it isn't is wrong. I just wish someone could convince me to do it.
One last thing I don't post very often but it seems to me it would be a good idea to start a whole separate section or thread where people could go to have there online fights. I'm here to try and make myself a better trader and adapt to a world that seems to be breaking trading rules that one would think could never happen. I'm sure many people here feel the same way. Fighting with Don Bright or anyone else doesn't do anyone any good. Do it somewhere else. Thanks
 
hey stock 777
sorry my writing skills aren't up to your standards I couldn't afford college 27 years ago. I was a construction worker pouring cement in manhattan for 14 years before I was able to start trading. I guess the elite trader board is only for the real elite of the world like yourself . I thought I could contribute something and maybe learn a little bit. I guess I was wrong. No more posts for me. Good look to the rest of you
 
Quote from cas7598:

hey stock 777
sorry my writing skills aren't up to your standards I couldn't afford college 27 years ago. I was a construction worker pouring cement in manhattan for 14 years before I was able to start trading. I guess the elite trader board is only for the real elite of the world like yourself . I thought I could contribute something and maybe learn a little bit. I guess I was wrong. No more posts for me. Good look to the rest of you
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Don't worry about that douchebag...he has 4000 worthless posts and is ignored by most of the ET community.
 
Quote from GGSAE:

Don't worry about that douchebag...he has 4000 worthless posts and is ignored by most of the ET community.
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lol, apparently not by you, homie.

you a glutton for punishment?

PS Here are three paragraphs in only three sentences.
 
I didn't know the act of hitting the enter key after every few sentences, if only to make a post more readable, required higher education, a college degree, or even an IQ over 90.

I'll have to investigate further.
 
Quote from stock777:

I didn't know the act of hitting the enter key after every few sentences, if only to make a post more readable, required higher education, a college degree, or even an IQ over 90.

I'll have to investigate further.
More...

I won't be responding to this anymore...i only converse with actual traders.
 
I've a couple ideas about hybrid spread system but didn't tested it yet. If somebody has comments about it :


- Only taking the leg that is in the direction of the long term global trend( let's say the SP 500 daily moving average or something ... )

- Only taking long legs on stocks since it is more rewarding on the long term.

- volatility adaptative spread system


- spread trading the wildest stocks( those not following the index the most ) against ETFS or futures.


Does someone has already tested and made studies ( or real time trading )about one of the above?


Thanks.
 
Why not? All good ideas. But if you have the software to test the model, that is the way to go. Otherwise, models are often beautiful and make sense, but they don't always correspond to reality.

I have made a study of some of what you propose in realtime [using simulated fills but extremely conservatively so fills are 99% accurate]. The results are mixed and the devil is in the details.

nitro
Quote from TraDaToR:

I've a couple ideas about hybrid spread system but didn't tested it yet. If somebody has comments about it :


- Only taking the leg that is in the direction of the long term global trend( let's say the SP 500 daily moving average or something ... )

- Only taking long legs on stocks since it is more rewarding on the long term.

- volatility adaptative spread system


- spread trading the wildest stocks( those not following the index the most ) against ETFS or futures.


Does someone has already tested and made studies ( or real time trading )about one of the above?


Thanks.
More...
 
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