Trading
Pair trading adventure II
By Rainbow Coin  •  September 1, 2018
I burnt my finger on a punt trade (which did not originate from a pair trade set up). Ouch! A $100 lesson learnt - don't directional trade without doing homework and sleep on it. My current pair trade is on two strongly correlated (>0.8) stocks. It's fun to watch my how my trades are hatching daily and the tug-o-war. The two buddies looks like they are parting paths soon after a strong break out (upward) the day before. I hope they would play out nicely per my expectation e.g. don't pull a DNA helix pattern on me. I think this one needs some patience due to relatively low volatility of the counters. In pair trade, we can either trade a convergence or trade a divergence. Although trading a divergence gives more uncertainty because if the divergence don't go far in the planned direction, then there will be little trade gain ......
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By Rainbow Coin
I began exploring the financial world in year 2010, hoping to get out of the rat race and be financially independent. 2010 was the aftermath period of the Lehman crisis when a pretty shaken up market was struggling to recover. On hindsight, that was the perfect time to catch multi-bagger stocks should I be a veteran or at least had some basic knowledge of picking up 'gems'. My learning curve was steep then, as I have absolutely no friends or relative who could shed some light on what's investing about.
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