Technical Analysis Pair StocksTrading Strategy
QUICK INFO: Stockpair is the first brokers who introduced as
pairs trading. All tools are needed for technical analysis are provided here. Pairs
and binaries offered high payouts.
What’s the Pairs Trading?
Pairs trading is a easy way of online trading where the traders have to
select the stock pairs from the same industry and predict which stock will do
better performance in predetermined time frame. The Stocks are paired by
industry niche (computers, automotive, banking, telecommunications, etc) and are so called correlated or co
integrated pair stocks. IT means that you are trading pair stocks such as
Facebook vs Gootle, or General Motors vs Ford, etc ... Co integrated pairs data
charts have the tendency to go in parallel movements. The basics pairs trading
strategies is to make position a trade in the moments when the two charts go
apart and form a gap. Because the stocks are correlated it may be predicted
that sooner or later the gap will begin closing.
The Trading Strategy with Stockpair
Stockpair is a reputable brokers specialized in stock pairs trading.
Stockpair platform offers all the info needed to utilize a simple but perfect
stock pairs strategy. There are just two steps which need to be got to analyze
the data charts and find out the profitable trade entry. To know more
information watch the video.
Step 1: Find the space
Browse the top offered trading pairs and look for the space on the
'floating' chart which shows the pair stocks price movement from the starting
of trading day. Concept which stock is trading lower on the 'floating' chart.
There are two possibilities - 'blue' stock or 'green' stock.
Step 2: visit the technical charts
Click on the option and put a glance to 'technical analysis' and pairs
trading technical data charts. The technical analysis display the following
information:
- Blue stock price (black line
- (blue zone enveloping the black line) Bollinger bands indicator
- (green and red horizontal lines) Support and Resistance Levels
- (orange-brown line) RSI indicator
- (blue line) 'Blue' stock movement
- (green line) 'Green' stock movement
Step 3: Build the analysis of the technical charts
There are two cheep situations to look for:
If the 'blue' stock displayed on 'floating' data chart is lower, you
are visiting for the moments when the 'technical analysis chart' is displaying
the black line low on the bolinger bands (blue zone) and hitting or breaking
the lower recommendation level (red horizontal line). RSI (orange-brown line)
should become as low as possible, so preferably below level 30. It would hint
that there is many potential for the blue stock to turn direction and begins
moving upwards, thus finish the space. The trade is get place on the prediction
that blue stock will perform good. Expiry period should be set finish to the
time from when the gap began opening to the points of your trade entry. Time is
showed under the technical analysis charts. It means that you see that the gap
began opening at 11:30 and you are moving your trade at 12:00, you should set
up the expiry period at around 12:30.
When the
'green' 'floating' chart is lower, stock displayed, on you are seeing for the moments when the
'technical analysis chart' is displaying the black line high on the bolinger
bands (blue zone) and hitting or breaking the header resistance level (red
horizontal line). RSI (orange-brown line) must become as high as possible,
preferably above level 70. It would hint that there is many potential for the
blue stock to turn direction and begins moving downwards, thus close the space.
The trade is get place on the prediction that green stock will perform good.
Expiry time should be set and close to the time from when the gap began opening
to the points of your trade entry. Time is showed below the technical analysis
charts. It means that the iv you see
that the gap began opening at 11:30 and you are moving your trade at 12:00, you
should set up the expiry time at around 12:30.
Step 4: Enter your desired amount to invest and execute the trade.
Pairs Trading Example
In this video here are five examples presenting the pairs trading strategy
with Stockpair. Watch the video. In the presented examples a few shorter expiry
times were set up to build the video shorter. Even Sometimes shorter expiry times (10-20 minutes)
will yield better results, especially if this technical analysis charts are displaying
the black line breaking the recommendation or resistance levels and at the same
time breaking outside of the bollinger bands. In this type of moments even a quicker correction in the
direction of closing the space can be predicted.
