The algorithm monitors for deviations in price, automatically buying and selling to capitalize on market inefficiencies. These strategies are typically built around mathematical models that define the spread based on historical data mining and analysis. Today, pairs trading is often conducted using algorithmic trading strategies(Rule based) on an Execution Management System. The pair trading was pioneered by Gerry Bamberger and later led by Nunzio Tartaglia’s quantitative group at Morgan Stanley in the 1980s. Pair Trading is a neutral strategy which involves two stocks/indices with opposite positions at any given point of time to profit from any kind of market situations. Author of Marketcalls.in and Co-Creator of Algomojo (Algorithmic Trading Platform for DIY Traders) Backtest your Pair Trading Strategies – Amibroker AFL code ![]() Writing about Markets, Trading System Design, Market Sentiment, Trading Softwares & Trading Nuances since 2007 onwards. ![]() Strongly believe that market understanding and robust trading frameworks are the key to the trading success. Designed and published 100+ open source trading systems on various trading tools. Using Market Profile and Orderflow for more than a decade. Mostly Trading Nifty, Banknifty, USDINR and High Liquid Stock Derivatives. ![]() Rajandran R Follow Telecom Engineer turned Full-time Derivative Trader.
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