Tag Archives: Pair Trading Software

How to Avoid Bad Pair Trades: “Dog” of the Month January 2022

Lam Research Corporation (NASDAQ:LRCX) vs. Qorvo, Inc. (NASDAQ:QRVO)

***How to Avoid Bad Pair Trades*** Watch pair trader Pedro Alonso take you through our January 2022 Trade of the Month – this time we highlight a Top 30 trading signal NOT TO TRADE and why…so welcome to the first DOG OF THE MONTH for January 2022, LRCX vs. QRVO. It is just as important to learn how to AVOID bad pair trades:

How to Avoid Bad Pair Trades

If you watched our Trade of the Month video for Dec 2021, you will have seen in detail how Pedro takes you through our pair trade screening “cheat sheet”

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Pair Trade of the Month: December 2021

Trading Checklist for Signal Filtering: The Cheat Sheet! Alliance Bernstein vs. Victory Capital $457 on $2,000 margin in 6 Market Days 23% Return on Margin!

($5,000/leg using 5:1 CFD margin)

Trading checklist

For those of you who have been pair trading for awhile, and especially for anyone newly entering the activity, we’ve prepared a detailed video that captures our trading checklist that we deploy for pair trading signal filtering.

Watch pair trader Pedro Alonso take you through his thorough and effective trading checklist for filtering PairTrade Finder® PRO trading signals. See our “Cheat Sheet”

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November Pair Trade of the Month

A Lesson in Trade Management Techniques CRM vs. NUAN $497 Profit in 5 Market Days or -$385 Loss in 40 Days…

($10,000/leg)

Watch this short video in pair trade management techniques that highlights how applying a trailing stop or trade-to-target approach to your pair trading signals can significantly impact your profit and loss account consistency:

trade management techniques

A key element to your trading plan is the application of trade management techniques, which are critical, but before you can manage a trade you need high-probability trading signals to analyse and decide whether to execute. 

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Layer Up! Scale-In to the Best Pair Trades Using PTF PRO’s Layers Function

Looking for the Best Pair Trades? Want to Learn Advanced Techniques to Make Them Better?

In our effort to regularly deliver to our subscribers the best pair trades, we have developed a curated portfolio of 50 U.S. Cointegrated Stock Pairs, the FAST 50! What’s more, in order to seek to improve your potential Reward/Risk ratio further, and potentially reduce your maximum adverse excursion, we’ve added LAYERS. Welcome to the new LAYERED FAST 50 U.S. Equities Pairs July 2021 Vintage from PairTrade Finder®!  For a VIDEO explaining everything, see below:

Best Pairs to Trade

PairTrade Finder®’s FAST 50 Cointegrated U.S. Read More →

Stock Pair Trading the Top 30 Nov 2020 Vintage: First Five Weeks’ Results

For those of you who are new to this site, stock Pair Trading involves simultaneously entering LONG (i.e. BUYING) and entering SHORT (i.e. SELLING) two “paired” stocks.

stock pair trading

Why Pair Trade Stocks?

Stock Pair Trading has been shown to provide protection from market crashes, controlled risk, low correlation to the market averages and ability to generate significant and consistent returns.  Multiple recent research studies have demonstrated returns to be in the range of 2%-4% per month*, on a 4:1 leverage basis, over more than a decade.

Add in the use of Cointegrated Stock Pairs and the historical returns look even stronger**.

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EXAMPLE PAIR TRADE OF THE MONTH SEPT 2020

LCI Industries Inc. (LCII:NYSE) vs. Polaris Inc. (PII:NYSE) September was a good month for the signals generated by the August 2020 Vintage of our Top 30.   As an example pair trade, we want to drill down on a pair that has consistently delivered profitable trades over the last year, that of LCI Industries Inc. (LCII:NYSE) vs. Polaris Inc. (PII:NYSE).  The latest trade called on the pair didn’t disappoint, delivering $578 Net Profit and a 15% return on margin in 4 days.  Here is a detailed trade entry and exit analysis for this example pair trade: Video: Pair Trade of the Month Sept 2020

example pair trade

Backtest Results:

In backtesting over the three years prior to 24 August 2020,

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Cointegrated Stock Pairs: Top 30 August Vintage Post a Perfect Record in First Three Weeks of Live Trading Out-of-Sample

Cointegrated stock pairs

Pair Trading stocks involves simultaneously entering LONG (i.e. BUYING) and entering SHORT (i.e. SELLING) two “paired” stocks.  It has been shown to provide protection from market crashes, controlled risk, low correlation to the market averages and ability to generate significant and consistent returns.  Multiple recent research studies have demonstrated returns to be in the range of 2%-4% per month*, on a 4:1 leverage basis, over more than a decade.  Add in the use of Cointegrated Stock Pairs and the historical returns look even stronger**.

PairTrade Finder® PRO’s Top 30 Cointegrated Stock Pairs

But we prefer to put our money where our mouth is. 

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Stock Pair Trading System: Use It to Profit In Uncertain Times

Life Interrupted?

The recent life interruptions occurring for millions of people worldwide have left many at-home with too much free time.  Are you wondering how to re-deploy your time and energy to meet your personal and financial goals?  Is one of your goals is to develop a second or multiple income stream to allow you diversify away from reliance on a job (or a lack thereof)?  If so, we believe we can be of value-add.  Why not take the time with us to learn our acclaimed and proven stock pair trading system?

stock pair trading system

Our Stock Pair Trading System The stock pair trading system embedded in PairTrade Finder® PRO allows retail traders to easily learn and use a proven hedge fund strategy.  Read More →

Stock Pair Trading Through a Market Crash: Generate Consistent Profits

Stock Market Volatility Returns with a Vengeance

Last week in the U.S. Equities indices was certainly the definition of “interesting times”.  The DJIA crashed by over 1,800 points or 6.9% on Thursday, only to recover about 1.9% on Friday.  The S&P 500 behaved similarly.  The NASDAQ was a bit less volatile, but we think it’s saving up for a chance to really out-do the others.  Quite some volatility.  However, for many of our clients, it was an excellent opportunity to generate increased profits by stock pair trading through a market crash.

stock pair trading through a market crash

Market Volatility Has Been Shown to Increase Pair Trading Returns

We predicted this continuing volatility in our earlier blog post in April of this year. 

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Best Trading Strategy for Lockdown Volatility?

What is the best trading strategy for highly volatile markets?  The results of our Top 30 U.S. Equities Pairs over the last four months would suggest U.S. equities pair trading.  If you had been trading the unfiltered trading signals from our Top 30 U.S. Equities Pairs, as updated, from 12 November 2019 until 1 April 2020, these generated an almost 30% return on account equity.  The S&P 500 returned -19.5%.  That’s almost 50% alpha in 4.5 months.  Detailed results are here and here.

best trading strategy

The results of our research and development to create the Top 30 and to level up the power of our stock pair trading platform PairTrade Finder® PRO are very encouraging. 

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