Get started

Pairtrade

EURRUB: Pair tradeI will be buying the Ruble with Euros since I think we have tremendous downside potential as well as excellent yields as a carry trade. The setup is to determine size on each leg of the pair using 1 month ATR, or 3 times the daily ATR value, and then proceed to short the EURUSD and short the USDRUB pairs to profit from this juncture. You could look for a technical setup, but in this case, it's a bit tricky to find a stop loss location for it, so I prefer to deal with no stops, and no leverage, and just trade it as a pair. Good luck if taking this trade. Cheers, Ivan Labrie. Short EURUSD/Long USDRUB, volatility adjusted, downside potential: 34.48, upside risk: 93.69
Short
by IvanLabrie
Pair Trade - Short CNQ and Long XLEThis is a pair trade idea based on CNQ/XLE pair cointegration. My calculations show that these two stocks diverged by more than 2 standard deviation and, based on mean reversion, should come back to mean. This pair's rolling mean is 28.3 over the last 280 trading sessions. The current value is 23.6 and one standard deviation is 1.8. The trad can be done by shorting CNQ and going long XLE in the proportion calculated through beta. Alternatively, it can be entered as two credit spreads - bear call spread on CNQ and bull put spread on XLE. This is how I will be entering this trade on Monday when the market opens - $CNQ $22/$24 Feb 21 bear call spread for $0.5 cr and $XLE $57/$55 Feb 21 bear put spread for $0.6 cr. Will be watching the bear call side and adjust if necessary.
NYSE:CNQ
by Options.Alpha
AMZN/BABA: Interesting pair tradeWe have an interesting setup with only 3.65% downside, but with a potential 23.02% upside based on my 'Time at Mode' analysis of this ratio chart. Fundamentals for AMZN are good in the long term, it has been a relatively strong company, and has many interesting future developments ahead (like the introduction of drone delivery of goods, ocean freights from China, to name a few). Many would consider it to be overvalued, but I think it offers a good technical and fundamental setup here, pitted against Alibaba. The idea is to go long AMZN and short BABA, adjusting the position size based on volatility. I won't delve much into the specifics of position sizing but it's of paramount importance for this type of trade. If we risk 1%, we can make 6.3% in this trade, and it's an intermediate to long term trade. Good luck if taking it with me. Cheers, Ivan Labrie.
NASDAQ:AMZN
by IvanLabrie
EURAUD: Ideal opportunity for a pair tradeAfter seeing The Working Trader's idea I figured I could attemp a pair trade in this pair, to take advantage of the interest rate differential in both EURUSD short and AUDUSD long. The entry will be a market order, but I'd have to see how the markets open tomorrow, I will update the chart by then. For now, keep in mind that for pair trades, I aim to open a big position on each side, which thanks to the pair trade's more 'market neutral' stance, lets me use no stop loss and be somewhat safe, at least, as long as the ratio chart's setup is valid (in this case EURAUD). The advantages are multiple, check out The Working Trader's post in 'related ideas' for more information, I detailed it there. For now, if you want to enter this trade, find out the ADR value (atr of 1,5,10 and 20 bars added together and divided by 4). Once you know this you can calculate position size in base on your desired risk, per day. You will have to watch the trade, unless you're deep in profit, it won't be a set and forget deal. Good luck, and wait for the update regarding entry tomorrow. Target is initially the time at mode one, but it can retrace the whole terminal wedge (it should for it to be valid, and it has to occur in 1/3-1/4 the time it took to be formed). Cheers, Ivan.
Short
by IvanLabrie
11
EURCAD: Clock is ticking...EURCAD has one more week left to reach 1.47561. If it doesn't, it will most likely turn into a short with a 1 weekly ATR stop. 13 week CCI is showing bearish divergence, and we're close to 6.18 std deviations from the linear regression of the downtrend from high to low (figured it was an interesting value). Rgmov is stuck in a range, not putting out any new highs while this advance lasted, which isn't particularly bullish to begin with. I'll monitor this pair and update the post when we get the entry, for now, remain vigilant, the news today and tomorrow are of very high impact, we might get an earlier entry watching the daily and 4h charts. The ideal first target would be a retest of the mode at 1.37066 but there's a previous mode at 1.42518 that might make the pair slow down, or reverse before reaching it, so keep that in mind when managing the position (if we ever take it). You can try with pair trades, or directly trading the cross. Good luck, Ivan.
Short
by IvanLabrie
21
NZDUSD: Time at mode downtrend failure and new bullish signalAnalysis on chart, simple. We can go long on 50% retracement of today's bar from open to high. Stop at the open or at the mode below: 0.65762. Rgmov confirms the trade, it broke out of a long term downtrend trendline and bottomed ahead of price. Nice CCI divergence and higher momentum than previous peak, implying this rally is sharper than the declines before. Once we clear 0.67375, this pair can fly. For now, I'm long using an NZDCAD pair trade to be safe, since NZDCAD fired an even larger uptrend signal, and Cad being bounded to crude suffers constantly from its fall. I couldn't publish it on time, but it looks like a great opportunity now that it's confirmed. FullTimeProTrader did post a buy, so props to him for the keen eye. Good luck! Ivan.
Long
by IvanLabrie
8
The idea of pair trading: Industrial Metals & Minerals.Ladies and gentlemen, I recommend you the idea of the pair trade: 1. it is long position in the company OCIR (OCI Resources LP) and short position in the company RIO (Rio Tinto plc). 2. it is long position in the company OCIR (OCI Resources LP) and short position in the company ARLP (Alliance Resource Partners LP). Stocks of the company OCIR are stronger than RIO and ARLP since 2014. I think that next 2 months stocks of the company OCIR will be stronger than RIO ana ARLP. Risk-management: I reccomend to use a conservative approach. The trade capital divide equally between 2 pairs: OCIR-RIO and OCIR-ARLP. The proportions of each company in pairs: 1. Stocks of the company RIO are more volatility than OCIR: * 53% it is long OCIR. * 47% it is short RIO. 2. Stocks of the company OCIR are more volatility than ARLP: * 37% it is long OCIR. * 63% it is short ARLP. This allocation between stocks is necessary for the parity volatilities.
O
by Pairtrade
EUR vs GBP: Pair trade setupSimple trade, trends are pretty clear here I believe. EURGBP is a strong downtrend and will resume its direction this week I believe. GBPUSD is an interesting long setup, with 11 weeks at one price and sitting above the mode currently. You can market buy now, but it'll be 100% confirmed once it reaches my entry level on chart (1.57084). Targets are for both time and price, you can trade all 3 as single pair trades, or use ADR to measure position size on each side and only trade eurusd and gbpusd on opposite directions. ADR values are: GBPUSD: 105.6 pips/day EURUSD: 98.6 pips/day So if risking 2% with a 10k capital, you will use 0.19 standard lots for GBPUSD and adjust the EURUSD position size by volatility to match the GBPUSD one as follows: 105.6/98.6 = 1,070993914807302 (ratio to adjust EURUSD position size with) Thus, EURUSD lot size should be: 0.22 std. lots If trading single pairs, it's simple, cost per pip as everyone knows. Good luck, Ivan.
by IvanLabrie
4
NZDCAD/Pair trade: Just short everything...I like to go short, I find the best trades I take are shorts, not sure why, but it's true. Here we have 3 short opportunities, which are linked by correlations. The NZDCAD ratio chart, or exotic pair if you want to call it that is offering us a nice trend continuation opportunity. I will use this as a way to hedge my exposure to a more aggressive and more of a 'long shot' trade that I want to take in USDCAD, which is a short under the last daily low (and a second entry a bit lower). The trend was strongly up but rgmov has peaked before the last top, and the time at mode trend signal has expired in the daily. It's possible this is an intermediate correction before a new leg up, that I have no way to know (I do have a projected top target a bit higher) but it's looking like a compelling short sell right here, right now. As for NZDUSD, everyone and their mother wants to find the market bottom, but that's usually a hard and risky endeavor, so I will short in the face of range expansion resistance, and a clear downtrend with a nice push up thanks to the gold short squeeze rally, which gives us a nicer entry and clear stop location. Here's the entry and sl parameters (if you trade the individual pairs, I will be trading with no stop loss on the *usd pairs, and with a stop and lower leverage in nzdcad): NZDCAD: Entry under last daily low, stop above the last highest high. Target is a retest of the lowest low at least. USDCAD: Entry under last daily low, stop above the highest high, no tp but watch levels on chart. Second entry at 1.29157, same SL. Splitting this in two equal risk % is a good idea. NZDUSD: Entry under last daily low, stop above the highest high, no tp. Simple... If you want to trade the no SL pair trade setup, find the ADR of each pair (which is /4) and then base position size on risking the desired percentage of your capital on the whole position. Adjust the smaller ADR pair position size by the result of dividing the larger ADR by the smaller one. Here I get: USDCAD: 99.5 pips per day NZDUSD: 92.1 pips per day So, 99.5/92.1=1.080347448425624. Thus, we risk 1-5% on each side of the trade, but the smaller ADR one is multiplied by 1.080347448425624 to get the correct lot size. That's how I trade these at least. See related ideas for my longer term view on gold, and other important correlations. Special shout out to jangseohee, he brought the nzdcad chart to my attention again. His ideas are linked there too. Good luck, Ivan.
Short
by IvanLabrie
17