Algokid

PAIR TRADE ( STEEL & IRON) ZEUS VS. STDL

BATS:ZEUS   OLYMPIC STEEL INC
213 3 0
CORRELATION : 99%
CO - INTEGRATION : 0.70

long ZEUS             (green) @ 16.54
short STLD             (red) @11.06
Closing this trade with a loss
Reply
Thanks for the update. Taking losses is the only way to survive in this business.

From what it looks like to me here, uninvolved. If you get a turn from this wide spread, then it looks like a good setup. So, give a few days breather and look at it again fresh.

As a comment on position sizing your trades: If you look at a 1 year time-frame and then reference your pairs to 20% max spread for a full position, then 40% max spread in two years time frame equals 1/2 position size. You can set your max to a number too, perhaps 50%. Just throwing some comments out.

Keep up the great work.
Reply
Hi Tim

I remember you giving the recommendation about the spread on one of my very first pair trades here. I have since implemented that rule when trading pairs. If the spread is more 20 % , I don't enter the trade. This resulted in less trade , but higher probability of profit on the trades I do take. Thank you for that. :)
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