Pairtrade Finder

barrychucks · Sep 27, 2008

Ive been spending all day looking for trading systems to start paper trading, mainly one's for stock trading US & UK shares as they fit my timezone pretty well, i stumbled upon this one Pairtrade Finder there platform seems pretty cool & what it does. has anyone used them?
The search continues

stocktrader77 · Sep 27, 2008

yeah ive been using pt finder for awhile, great program but I wouldn't reccommend it to a newbie

barrychucks · Sep 29, 2008

Are u saying im a newbie? thats not nice! just kiddding, i am a newbie, but hey everyone has got to start somewhere. would you mine telling me why you wouldn't recommened it to a newbie? from what I can see the program makes sense

dmilong · Sep 30, 2008

I think pair trading is twice as risky as long or short strategy. You can lose both ways. I know of a fund manager who had shorted financial stocks against tech stocks on margin and when there was a short covering of financials, techs went down and he lost more than 40% of account.

stocktrader77 · Oct 1, 2008

barrychucks said:
Are u saying im a newbie? thats not nice! just kiddding, i am a newbie, but hey everyone has got to start somewhere. would you mine telling me why you wouldn't recommened it to a newbie? from what I can see the program makes sense

Yes it may make sense to you however pair trading also known as statistical arbitrage is what most professional traders and the hedge funds do, so you have to have high level of disclipine, good trade management among other things, im not trying to put you down, just that proper pair trading takes skill, once you have that skill pairtrade finder is a tool that you can use to harness it.

stocktrader77 · Oct 2, 2008

dmilong said:
I think pair trading is twice as risky as long or short strategy. You can lose both ways. I know of a fund manager who had shorted financial stocks against tech stocks on margin and when there was a short covering of financials, techs went down and he lost more than 40% of account.

This comment is a little short-sighted don't you think. The relationship between two highly correlated shares is more predicatable than the outright direction of any given stock, plus most traders that have actually made money usually trade some form of pair trading(arbitrage). Your example of the fund managers trade is just an example of bad practice & bad judgement, if you trade correctly one trade will never hurt you enough to have a substantial drawdown or lose sleep over. This fund manager obviously doesn't have a good risk management strategy. Succesful trading is all about making heaps of small trades that give you a small statisical advantage. Just like a casino.

barrychucks · Oct 4, 2008

that makes a lot of sense what you said above stocktrader, can i ask you how long your've been pair trading for and how you have found it, espically in recent times? thanks in advance.

stocktrader77 · Oct 7, 2008

no worries barry, Ive been pair trading for 5 years now, the last 4 of them profitable. Ive grown to trust it immensely and it has provided for me well. This recent volality is great and I hope it never stops, great opportunities to those that can identify them.

Castor · Oct 9, 2008

stocktrader77 said:
no worries barry, Ive been pair trading for 5 years now, the last 4 of them profitable. Ive grown to trust it immensely and it has provided for me well. This recent volality is great and I hope it never stops, great opportunities to those that can identify them.

Encouraging stuff for those of us who are starting pair trading. Tell me, though, can Pairtrade Finder be used with any stocks? Or does it only work with US securities?

stocktrader77 · Oct 10, 2008

Castor said:
Encouraging stuff for those of us who are starting pair trading. Tell me, though, can Pairtrade Finder be used with any stocks? Or does it only work with US securities?

Castor, yes the software can be used with stocks from 53 international stock exchanges i think. I trade NYSE, NASDAQ & LSE stocks using it.

Castor · Oct 10, 2008

Thanks, stocktrader 77. Much appreciated. I see there's a 30-day trial on offer so I'll give it a go. Btw, I notice that there are pair trading threads scattered all over this site. There's an argument for creating a dedicated section. Or perhaps someone knows of a forum for pair traders?

stocktrader77 · Oct 11, 2008

yeah a pairtrading section would be great, maybe il ask one of the moderators, otherwise this is the only pairtrading forum i know of is Pairs Trading Forum • Index page there are some more experienced pair traders that hang out there.

Castor · Oct 11, 2008

Thanks. I'll check it out. And best of luck with the moderators.

barrychucks · Nov 4, 2008

hey stocktrader, i bought the program! made my first 3 trades already, first trade is still open showing a small loss, then closed a small win and just recently made a huge $2189 on MOT/JNPR!!! i have a quick question for you; what settings do you use in pairtrade finder, ive got pair stretch at 2.25 and ratio/stretch/stdev lookbacks at 20, found this works ok, what settings do you use? thanks again.

stocktrader77 · Nov 8, 2008

ive got pair stretch at 2.05
ratio-stretch-stdev lookbacks at 15

jeffsmith · Nov 8, 2008

stocktrader77 said:
no worries barry, Ive been pair trading for 5 years now, the last 4 of them profitable. Ive grown to trust it immensely and it has provided for me well. This recent volality is great and I hope it never stops, great opportunities to those that can identify them.

Of course opportunities for those who can recognise them well enough. I seem to find more of them in volality too, tho I am only 2 years in trading.

ncscanada · Jul 4, 2009

Hi, StocTrader,after making loses for a year I am looking for new strategy. I just heard Pair Trading 2 weeks ago. I have silly question to you: when you pick a pair stock, what all factors you need to look for? one them I know like correlation.thanks

downcrusher · Jan 19, 2011

ncscanada said:
Hi, StocTrader,after making loses for a year I am looking for new strategy. I just heard Pair Trading 2 weeks ago. I have silly question to you: when you pick a pair stock, what all factors you need to look for? one them I know like correlation.thanks

This shouldn't be discussed in this thread. I'd recommend you to buy some literature on pair trading first.

Anyway, does anyone who has tried this software recommend it? I mean, apperently, it's pretty expensive and according to the tutorial video the handling doesn't look to complicated.

Regards

MachineGhost · Feb 18, 2011

If you don't have a better strategy, such as swing trading or daytrading, then I would recommend the software as it eliminates a lot of groundwork. Just don't confuse being simultaneously short a highly correlated stock with being a "market hedge", technically it is more of an "industry hedge". Risk is still dependent on time spent and exposure to the market.

lieblm · Nov 10, 2011

Hi, I've been testing PairTradeFinder for several months now and I am quite happy with it. I plan to use it for real pair trading. I'd be happy to share more details if anyone is interested

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