Monthly Archives: January 2017

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15 Trading Tips for Trading Equities Pairs with Pairtrade Finder’s Stock Trading Software

Tip #1 – Determine Why the Trade Signals for a Pair Trade Were Generated


So things are going well in your quest become a profitable equity pairs trader.  As a result of following our 3-Hour, 11-Lecture Pair Trading Video Course, you have:

  1. Installed Pairtrade Finder v3.27 on your PC and ensured you have a clean internet connection to access Yahoo! Finance data and keep your My Watchlist pairs updated both EOD and intraday;
  2. Created groups of equities that are in the same or similar industries and sectors, have market capitalizations of at least $1 billion, and have a daily traded share value of at least $5 million.  You can use our pre-loaded Excel sheets for this task, and copy and paste the tickers for each pre-filtered industry grouping into the Create Group entry screen;
  3. Generated the results of your backtests using your preferred parameters (we use an Entry stretch of 2.7 sd and an Exit stretch of 1.0 sd and always backtest over three years or more, looking for at least 8-10 trades in the pair history, and initially use only one Entry Layer);
  4. Screened the backtest results by your preferred parameters (we like to see at least $500 avg profit per trade using $10,000 per leg, at least 80% winning trades, and any largest losing trade that is no more than 50% of the avg winning trade);
  5. Saved the resulting pairs to My Watchlist so that they can now be updated both EOD and intraday to generate Trading Signals;
  6. Configured your email address into Pairtrade Finder to allow you to receive Trading Signals by Email if you desire.

Below is a sample backtest from a good-looking pair EPAM/MANH (EPAM Systems, Inc. and Manhattan Associates, Inc.):

PairTradeScreen1

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