Pairs Trading

[ianh]

Grey,
I called Paul's entries from a couple of minutes before his posts as QLGC 48.00 & GENZ 52.90

It did confuse me a little when both redart & you seemed to be looking at a different chart to me. LOL

As Paul says, the reward was over 100c on the pair as GENZ came back to the round number, but the important thing is "The money's in the bank"

Ian.

 

[Trader333]

Both trades were closed at about the same time as shown on the charts.


Paul

 

[BlueChip Trader]

Paul

well done, good example of a low risk trade.

You said you don't wish to have alerts before 3pm. Is this to avoid high volatility during the first half an hour and therefore to reduce risk in the trade?

 

[Trader333]

Bobtarrel,

The displayed vwap is a calculated indicator and does not require a datafeed supplier to provide it.


Paul

 

[Grey1]

Ian ,

I am pleased to see the whole board watched Paul's real time trade.. This is the whole idea of showing what works and what does not.. If a trade goes against us then we hold our hands up and let the Board to see..

Reducing the risk is the key element of this strategy .. It is the control of the risk which makes this game into a business..

I will be posting my own trades as soon as I go back to trading .. I am in the need of rest and plenty of VOLTAROL Gel to sort out my water melon look alike sore foot..

 

[Trader333]

BCT,

Yes it is pretty much as you have said and was also commented on by Grey1. Before 3.00pm placing a trade, for me anyway, would be like having a punt on the horses. I prefer things to settle a little and in particular the high and low of a stock are better established. If I set my alerts to trigger from the open I would get alerted virtually every second.


Paul

 

[Trader333]

I know this isnt a pair trade but I am currently short ICST. Will post chart later win or lose


Paul

 

[Grey1]

BCT,

Pro's donot trade the open.. They trade the close.. Open is nothing but NOISE.. Money can be made and a lot of it at open there again it can also be made in CASINO too if one takes a proportional amount of risk. When I Read about trading the open using this or that method I straightaway know the writer is gambling.. All above IMHO

A gambler's reward is equal to his risk .
A trader's reward is greater than his risk..

 

[BlueChip Trader]

A gambler's reward is equal to his risk.
A trader's reward is greater than his risk..

Grey1

Excellent quote. Well worth remembering before putting a trade on.

I agree, Pros pay much more attention to the Close than the Open.

 

[Trader333]

Well I have been stopped out on ICST for 0. If I had closed the trade about 3 minutes earlier I could have walked away with +20 but I didnt and decided just to make sure that I wasnt taken for a loss.

It just shows you cant win them all.


Paul

 

[Grey1]

ICST is currently trading @ 29. 48..

You would have made a nice return of 1% if you had stayed..

regards

 

[Trader333]

I may well have done but I try and stick by the rule of not letting a profit turn into a loss. Also I think that many traders who when they get out of a trade and watch to see the market then move in their wanted direction are effectively getting negative reinforcement.

When I exit a trade as long as I have followed my plan I have no regrets regardless of what may have been.


Paul

 

[Grey1]

Nicely put.. Can't agree more..

 

[Naz]

When I exit a trade as long as I have followed my plan I have no regrets regardless of what may have been.


Paul

I agree Paul

 

[BBB]

Well done Paul. Not only for the wins, but owning up to a break even/loss.

Too many people who post their trades just show the winners, I sure we all know what I mean.

Only a real trader admits to a loss because he isn't bothered by it (if it's within the system parameters) OR other peoples opinions of him or his trading style. He is confident he makes money in the long term.

 

[volatileN]

Pairs trading

Hi,

Is anyone here employing a pairs trading strategy? If so how do you select your pairs? Purely statistically on a mean reversion basis or do you combine any fundamental view?

Cheers,

VN

 

[volatileN]

Ok, having displayed my stupidity by missing the enormous thread on the topic I will readdress my question.

How do you select your pairs and do you systematise it?

 

[Grey1]

Voatile,

There are huge amount of info on pair trading on the BB..both on correlation and other means of selecting pairs.
Mean reversion is one of them .

regards

 

[Trader333]

In a Pair Trade Short YHOO Long ERTS Charts Later

 

[Trader333]

Here are the charts of the YHOO and ERTS pair trade:

The first trade was the Short of YHOO at $47.52 and then the Long on ERTS at $48.41. YHOO dropped but ERTS was mostly static. YHOO continued dropping below its target and continued and at this point because ERTS had still not moved I was looking for a retracement by YHOO to exit both trades. This happened and I closed both trades for a profit of 39 points. The profit had been as high as 51 points but as I didnt know this was the optimum time to close the trade I let 12 points go back before closing it.

I hope it is of interest.


Paul