Advanced Pairs Trading Course
Winter 2008 Session
Topics Covered
In-depth look at troubled experienced and advanced
traders
The need for KAIZEN as professional traders
Building adaptability and flexibility into business plans
and trading strategies
The Three Key Disciplines of Pair Trading
- Discipline 1 SUBSTANCE (What you trade)
- Discipline 2 STRUCTURE (What you trade with)
- Discipline 3 STRATEGIES (When & How you trade)
Sunday October 5th Wednesday October 8th
Tools Used & Provided in the Course
Advanced Rediplus workspaces (multiple workspaces for multiple
strategies)
e-Signal templates & chart overlays
Advanced portfolio watchers
Pair & Portfolio analyzing software
Earnings announcements & dividend x-date data
gathering software
Single Stock Database and Trading Tools
Skills to be Acquired During the Course
Multiple advanced trading strategies for pairs (no more one-trick ponies!)
Understanding and using pair investment metrics
Evaluation of the risk-to-reward for the pairs being traded
Being able to read the market and developing the proper timing for putting on a trade
Increasing intra-day pair production
Setting and executing soft and hard stops
Developing on-the-fly trading edges
Low Priced Stocks, Long Only, Long vs. Short position sizing and management
Advanced use of e-Signal and Redi charts to improve execution and timing
Course Outline & Schedule
SUNDAY, October 5th
MONDAY, October 6th
TUESDAY, October 7th
WEDNESDAY, October 8th
AM Session
AM & PM Sessions
AM & PM Sessions
AM & PM Sessions
Orientation Lecture:
-Knowledge gained from active
trading over the last 14 years.
-Advancements in Pairs Trading
over the last 6 years.
-Troubled experienced and
advanced traders.
-Fatal flaws common to trading
strategies, and how to overcome
them
- Kaizen & continuous
improvement
- Adaptability & flexibility
-Three Key Disciplines
Trading with New Configurations:
Trading with New Configurations:
Trading with New Configurations:
DISCIPLINE FOCUS: Structure
RediPlus platform
E-signal
Portfolio Watchers
Advanced Accounting
DISCIPLINE FOCUS: Substance
DISCIPLINE FOCUS: Substance
When pairs fail
- What to do, and/or how to handle
pairs that are not performing
- Increasing Production through 3Way pairs
PM Session
Pair Portfolio Analysis
DISCIPLINE FOCUS: Strategies
- Traders review and optimize their
portfolios & pairs in terms of the
Absolute Execution
above strategies.
- Using the Market in order to
develop total awareness
- Develop and prepare the second
- Time of day
round of new platforms and pair
- Seasons of the Day, Week,
configurations
Month, Year, and 5-year Cycles.
DISCIPLINE FOCUS: Substance
- Good pairs & How to evaluate
them
- Basic Fundamental Metrics
- Advanced Statistical Metrics
Pair Portfolio Analysis
- Traders will be shown how to use
the pair portfolio analysis tools and
then together analyze their own
portfolios and business plans on
pairs
Pair Investment Metrics
Risk to Reward considerations
DISCIPLINE FOCUS: Structure
DISCIPLINE FOCUS: Strategies
- Scalping: Maximum Production
- Position Trades, Swing Pairs
- High Octane PETRA trades
- Capturing Drift
- Triple Threat Plays
Low Priced Strategies
- Explore Database
- Learn Trading Spreadsheet
- Explore Positions Sizing
- Develop Rule Based Trading
Effective Stop Losses
- Soft Stop.
- Hard Stop
- What to do after each stop is
implemented
Developing On the fly edges
- Understanding how
fundamental edges allow traders
to build edges
DISCIPLINE FOCUS: Structure
When pairs fail
- What to do, and/or how to handle
pairs that are not performing
DISCIPLINE FOCUS: Strategies
- Using pivot points and standard
deviation
- Harnessing individual stock volatility
- Piston and relative strength trading
- Maximizing the effect of options
and earnings seasons on pair trading
Individual Participant
Trader Assessments:
At some point during the course,
each trader meets with Rob to
complete an individual assessment of
his or her success over the past 3 to
12 months of trading
