Presentation by Geoffrey Hossie of Pairtrade Finder to the Marbella Business Institute, 24 February 2017.
An introduction to Pair Trading and Why It Matters To You.
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15 Trading Tips for Trading Equities Pairs with Pairtrade Finder’s Stock Trading Software
Tip # 3 – Analyze Your RSI Chart
Technical analyst J. Welles Wilder created the Relative Strength Index (RSI) as a tool to measure the strength or weakness of the closing price series of a security over time. It is a measure of both velocity (speed!) and magnitude (distance travelled) of price changes and can identify stocks that are either overbought or oversold.
The Relative Strength Index is calculated as RSI = 100 – 100/(1+RS). RS (Relative Strength) is usually calculated as the exponential moving average of daily gains/exponential moving average of daily losses during a defined time period.
… Read More →15 Trading Tips for Trading Equities Pairs with Pairtrade Finder’s Stock Trading Software
Tip #2 – Price Ratio Analysis
Pair trading often succeeds or fails based on price ratio analysis, which is the core of the system. The maths are simple: in two correlated stocks what is the ratio of stock A to stock B (price A/price B)? The closer the stocks are in price, the closer the ratio will be to 1. For example, if stock A is trading at $55/share and stock B is at $58/share, the price ratio is 0.95.
Watch For Changes in the Current of the Stream:
Correlated stocks,
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