ASX Stock Pairs Trade Journal

[Pairs Trader]

New trade

Long MLB @ 2.02
Short IRE @ 6.61

Still wishing I was on the water....

[tatankov]

Quote: Originally Posted by Pairs Trader New trade Long CTX @ 9.98 Short AOE @ 3.93 Cracker of a day up here in Queensland, should be out on the water

[tatankov]

PairsTrader,

Do you usually look at pair backtesting, before entering the trade?
How important is to you?

[daCoops]

Hi All, I've been following a few people who have been using this software (including yourself, and a guy called jonnysharp on elitetrader.com forum)

I too have taken a look at the 30 day trial, and am impressed at the possible trades it shows up (papertrading only).

I would like to start using it, but do not have a great amount of funds to invest - so I'm expecting to simply make very little profits, a few pounds above the commision. (I'm UK based btw)

My question is whether its best to use PairTrading with a CFD account or a Spread Betting account? Can someone more pro than myself give a few tips with respect to Pair trading using Spread bets / CFD's

Many thanks!

[skc]

Quote: Originally Posted by daCoops Hi All, I've been following a few people who have been using this software (including yourself, and a guy called jonnysharp on elitetrader.com forum) I too have taken a look at the 30 day trial, and am impressed at the possible trades it shows up (papertrading only). I would like to start using it, but do not have a great amount of funds to invest - so I'm expecting to simply make very little profits, a few pounds above the commision. (I'm UK based btw) My question is whether its best to use PairTrading with a CFD account or a Spread Betting account? Can someone more pro than myself give a few tips with respect to Pair trading using Spread bets / CFD's Many thanks!

[Pairs Trader]

Exited two trades this morning, both for profits

Sold NWSLV @ 11.50 (1.56% loss)
Covered NWS @ 13.21 (4.08% profit)

Sold CTX @ 10.16 (1.80% profit)
Covered AOE @ 3.80 (3.42% profit)

22 Wins
1 Scratch
1 Loss

[Pairs Trader]

Quote: Originally Posted by tatankov That is one trade i would skip. You are going against a uptrending ratio.

[Pairs Trader]

Quote: Originally Posted by tatankov PairsTrader, Do you usually look at pair backtesting, before entering the trade? How important is to you?

[Pairs Trader]

Quote: Originally Posted by daCoops I too have taken a look at the 30 day trial, and am impressed at the possible trades it shows up (papertrading only). I would like to start using it, but do not have a great amount of funds to invest - so I'm expecting to simply make very little profits, a few pounds above the commision. (I'm UK based btw) My question is whether its best to use PairTrading with a CFD account or a Spread Betting account? Can someone more pro than myself give a few tips with respect to Pair trading using Spread bets / CFD's Many thanks!

[tatankov]

Quote: Originally Posted by Pairs Trader I would opt for a CFD account, however there's plenty of guys using it on spreadbetting accounts successfully. Most of us down here use CFD's, Americans aren't allowed by law to trade CFDs, so most of them are using IB or prop accounts, we are very lucky to be able to trade equities with leverage, this is still a new concept. A couple of thousand pound a/c should be enough for your commissions to be within an acceptable % level of your gross profits. Ideally you don't want your commissions to be more than 30% of your gross profits, mine is around 8%, some think if you have a strong edge up to 70% of your gross profits can be spent on commissions, personally that's out of my comfort zone and I would feel sick how much dollars I would be making the broker.

[daCoops]

Hi All,

Thanks for the advice guys with respect to the CFD vs Spread Betting. I've been taking a look at the various brokers and things, and think that I'm going to go ahead with CMC Markets and Spread Bettingoption to start out. It should be a good option, especially with an initial account of only about 1000.

I've checked, and minimum account is only £200, theres no commission on the trades, they require only aroun 3 - 5% margins for UK stocks, and the spreads seem tighter than IG Markets for example...

Will simply give it a go and see what happens - I'll try to post my pair trades but I'm not promising anything... (although will try to post some summaries once im on the go)

[beamstas]

Quote: Originally Posted by daCoops It should be a good option, especially with an initial account of only about 1000.

[skc]

Quote: Originally Posted by daCoops Hi All, Thanks for the advice guys with respect to the CFD vs Spread Betting. I've been taking a look at the various brokers and things, and think that I'm going to go ahead with CMC Markets and Spread Bettingoption to start out. It should be a good option, especially with an initial account of only about 1000. I've checked, and minimum account is only £200, theres no commission on the trades, they require only aroun 3 - 5% margins for UK stocks, and the spreads seem tighter than IG Markets for example... Will simply give it a go and see what happens - I'll try to post my pair trades but I'm not promising anything... (although will try to post some summaries once im on the go)

[Pairs Trader]

New trade

Long LGL @ 3.23
Short SGX @ 6.03

[akzidenz]

@Pairs Trader, great thread, thank you for posting all this information, I enjoy keeping up with it.

You have posted your win/loss/scratch stats, but not number of trades open. Are you running any unrealised losses in there?

Also, as you've now been doing this journal for almost 3 months, would you have the time to prepare a summary of trading during that quarter, with slightly more info? I hope that doesn't sound onerous and doesn't need to be. I'm just very interested to know things like biggest/average/total: win/loss %; days in market; exposure; and anything else.

Keep up the great work here, and I wish you profitable trading!

[Truth]

Pairs Trader,

Good Morning from Atlanta. I have a question. Is it reasonable for a trader to trade this method on an end of day basis, placing orders at night to be filled at the open? Or, do they need to be placed intraday?

[So_Cynical]

Hey pairs

First time ive looked at this thread

Long LGL @ 3.23
Short SGX @ 6.03

As a long term Gold watcher and investor i can see where this combination
comes from...also can see how the short could go very very wrong.

By backing 2 stocks arnt u doubling the risk...u need 2 directions to go your
way...i find getting one stock to move my way hard enough.

GL

[MRC & Co]

Quote: Originally Posted by So_Cynical By backing 2 stocks arnt u doubling the risk...u need 2 directions to go your way...i find getting one stock to move my way hard enough.

[So_Cynical]

Quote: Originally Posted by MRC & Co Yes, it is infact doubling the risk, but at the same time, 'hedging' it. If that makes sense? Pure mathematical correlations.

[Pairs Trader]

Quote: Originally Posted by akzidenz @Pairs Trader, great thread, thank you for posting all this information, I enjoy keeping up with it. You have posted your win/loss/scratch stats, but not number of trades open. Are you running any unrealised losses in there? Also, as you've now been doing this journal for almost 3 months, would you have the time to prepare a summary of trading during that quarter, with slightly more info? I hope that doesn't sound onerous and doesn't need to be. I'm just very interested to know things like biggest/average/total: win/loss %; days in market; exposure; and anything else. Keep up the great work here, and I wish you profitable trading!