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.
After I started trading on NASDAQ and NYSE stocks, I realised how 'cool' the SG market is compared to the US market. Over there it's so happening with so many articles on their hot stocks EVERYDAY, it can be difficult to keep up sometimes.
News today: https://www.bloomberg.com/news/articles/2018-08-29/asian-stocks-set-for-gains-dollar-retreats-markets-wrap
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Update 02 Sep 18
My twins parted path as expected, giving me a disappointing result. They have reversed to a downtrend at Friday's close and my long twin nose-dived further than my short twin. It's a waiting game now with the hedge in place. Moodswing market.
Update 06 Sep 18
This trade left a sour taste as one of the stocks announced ex-div (serve myself right for not researching) and since I held a short position, I have to cough out the dividend. Thereafter I got stopped out for both positions at a loss. :(
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(On the other hand, I am staying on the sideline doing nothing for my SG portfolio. Thankful that it is still in green health (+5%, excluding all dividends) and reaped nice dividends this month. Divested some of my Silverlake shares at a loss.)
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.
After I started trading on NASDAQ and NYSE stocks, I realised how 'cool' the SG market is compared to the US market. Over there it's so happening with so many articles on their hot stocks EVERYDAY, it can be difficult to keep up sometimes.
News today: https://www.bloomberg.com/news/articles/2018-08-29/asian-stocks-set-for-gains-dollar-retreats-markets-wrap
----
Update 02 Sep 18
My twins parted path as expected, giving me a disappointing result. They have reversed to a downtrend at Friday's close and my long twin nose-dived further than my short twin. It's a waiting game now with the hedge in place. Moodswing market.
Update 06 Sep 18
This trade left a sour taste as one of the stocks announced ex-div (serve myself right for not researching) and since I held a short position, I have to cough out the dividend. Thereafter I got stopped out for both positions at a loss. :(
--
(On the other hand, I am staying on the sideline doing nothing for my SG portfolio. Thankful that it is still in green health (+5%, excluding all dividends) and reaped nice dividends this month. Divested some of my Silverlake shares at a loss.)
"At times you will only find out if an apple tastes bad after taking a bite."
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