Pair Trading With A Twist by Domenico D’Errico
Trading stock pairs may be something that you may not think about much. But if market conditions are such that no trading methodology of yours is going to work, it’s best to keep your options open. Here, we look at pair trading to ﬁnd which approach works best for trading them.
Mature markets like US/European stocks and futures exchanges are getting crowded. Globalization, easy access to trading platforms, and low brokerage commissions are attracting thousands of people from all over the world to trade ﬁnancial markets. Although this increases trading volume and brings more liquidity to the markets, it can cause an exponential noise increase on price charts ...