does anyone trade like this?

[donpanic]

I was thinking that it would be possible to exploit the change in difference between the value of two assets instead of the change in dollar value of one asset. An example would be to buy asset A and once the difference between asset A and B reached some thresh hold sell asset A while buying asset B. In this way fluctuations in the market as a whole are filtered out creating a synthetic market based on the value of asset B. I am not a trader so this may all be bull****

 

[Rhody Trader]

What you're talking about is commonly referred to as spread or pairs trading.

 

[Martinghoul]

What you're talking about is commonly referred to as spread or pairs trading.

Except you're legging the spread...

A friend of mine had some words of wisdom on this (pls forgive the language):
Legging the spread is like spreading your legs - you might get f*cked.

 

[donpanic]

Pair trading is exactly what i was thinking about thanks. I think your friend meant if your legs spread you will get ****ed since it depends on a strong correlation between assets. Its going to take me forever to learn trading theres so much ground to cover.