The ACD Method

Quote from kinggyppo:

how about short bac long aapl for a pairs trade.
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However, had you put this bad boy on a when BAC confirmed, you would have had a nice trade. You're getting there King!

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Mav when you look at pairs do you look at dollar amounts, so if I am following you that short a stock at an A down long a stock at an A up would trend better?
 
Quote from kinggyppo:

Mav when you look at pairs do you look at dollar amounts, so if I am following you that short a stock at an A down long a stock at an A up would trend better?
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Sure, in a perfect world you would find both. But you could settle for just one of the stocks breaking out or down and the other showing relative weakness or strength respectively.

Think about it, if you take a long stock at an A up and a short stock at an A down, both are legitimate trades on their own. By spreading them you just remove the market risk.

I look at dollar amounts because I want to be long volatility.

I do prefer to spread ETF's vs stocks unless you have a really strong move because of the gap risk.
 
Quote from Maverick74:

However, had you put this bad boy on a when BAC confirmed, you would have had a nice trade. You're getting there King!

f04310bf08ee740515e0cd0d952e3a63.png
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BTW, BAC confirmed on the 21st. Notice on that chart that is where the slope started to increase dramatically.
 
Quote from kinggyppo:

I wouldn't be surprised if we got a 20 point gap up on friday.
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Maybe but we might get a 20 pt gap down tomorrow while you are eating your turkey. Europe always like to implode when we have a holiday. LOL.
 
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