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Pairtrade Finder (PTF) Version 2.97 User Manual

1. Fees Symbol Look U Have a Question for Sales p Developer Call 800 475 4755 CME Exchange Fee or Waiver Email sales iqfeed net Support Forums Compatible Software Get Free Trial Now SALES g caes SUPPORT Add Cancel Services i Online Bill Pay Download Client Live Chat CLICK TO CHAT OFFLINE 100 Referral Credit Other Products i Once you have signed up to lQfeed you will need to enable Qfeed in PTF please click on system preferences then enable IQfeed Then you will need to change your stock groups to IQfeed this is done via the stock groups tab in system preferences Description US Stocks Investment Brokerage New York Stock Exchange i Cointegrated Pairs Yahoo LSE Financials Test Yahoo PS al Stocks Life Insurance i Start Time 12 00 AM End Time f Monday _ Tuesday Wednesday _ Friday Saturday _ Sunday _ When creating new groups don t forget to choose IQfeed there too 3 2 Using PTF with International Stocks Pairtrade Finder sources its data from yahoo finance by default it is free 15 min delayed data automatically imported into the software Alternatively you can subscribe to real time market data for US stocks Canadian stocks futures options and forex via an lQfeed data subscription at www igfeed net pairtradefinder Yahoo finance supports the majority of international stock exchanges you can find a list of supported e
2. 6 0 72 2 62 D gt 0 22 1 01 0 66 302 10 34 2 90 0 15 0 52 oo 4 6 56 0 49 4400 Watching 2200 Watching 4500 Watching 9200 Watching O O O O US Stocks Investment Brokerage Shown below are the functions of some other buttons you will find on the home screen i i a r 4 5 Fs f aa B ma 2 a B sA ding Pair Stock System Pair Stock Intra day Edit Pair Delete Refresh Save Excel Reset ynals Add List Preferences Charts Charts Spread Chart Layers Prices Layout Export Layout Optio MY Correlation efr Y Stock Group YrlA 0 31 ng US Stocks Investment Brokerage 15 2200 Watching 0 1 44 1 57 g US Stocks Investment Brokerage 10 D0NN AMa tchina n nA NIE AX 5 a LIC Ctacle Inunrtimant Beralearaan As you can see the home page is your bird s eye view of your all pairs at once from here you can rank them according to the different columns or you could filter to only show pairs currently in a trade or filter to show only a particular group etc Please continue onto section 2 4 for information on how to monitor for trading signals 2 4 Receiving entry and exit signals on your pairs You have now created a stock group found and saved good pairs know where to see them all at once now you can use the triggers window to monitor for upcoming trading signals Trading signals will come in during market hours or your specified time Please
3. US Stocks Life I Prudential Financ Prudential Public 36 00 e SAA RR RRR RRR RRC COC OCC COC COCO OC CCOCOCCOCCOCccCcC CO cS Ce dN Saas aa aaa Reinsurance Group US Stocks Life I S5S5SS6S55o5n ee 00 been manna mameeaSSS S 555 5 55555523 352332248 A SSS SS SS eee NOLO ANM ENOO ONNM Charles Schwab Co US Stocks Inves ZANNNANAAMM EO On EN Oe a OO OI ANNAN i aii SEI Investments C US Stocks Inves MET Sun Life Financia US Stocks Life I PRU Torchmark Corpora US Stocks Life I TradeStation Grou US Stocks Inves Internet Connection e IQ Feed Connection If you wish to see the latest news items released on a particular stock click on it in the left hand column then click on the View in yahoo finance button i Home i I eo Home Home Code AMTD BGCP ETFC IBKR KBW LFC LNC x Tt m 2 a n A Trading Pair Signals Pilot Create Back Group Tester A Stock Add List Backtest for US Stocks Investment Brokerage X Description TD Ameritrade Hol BGC Partners Inc E TRADE Financial Interactive Broke KBW Inc Common St China Life Insura Lincoln National Ladenburg Thalman MetLife Inc Com Y Group US Stocks Inves US Stocks Inves US Stocks Inves US Stocks Inves US Stocks Inves US Stocks Life I US Stocks Life I US St
4. Y TEV AVGCEY Profit VV Profit Per Trade Y WinningE VY A 33 84 2389 06 mie Fey 100 00 4 28 72 6161 10 1540 28 100 00 6 38 33 3431 56 2 193 66 67 6 20 29 4855 59 809 27 66 67 6 65 38 3438 17 573 03 83 33 8 70 42 7430 57 928 82 100 00 5 66 27 re ye Ue 545 02 80 00 6 53 21 7751 85 1291 98 100 00 Sum 402056 8 Average 1240 765 Average 0 774 Now we will save all of these 55 profitable pairs to our home page to monitor further for trading signals going forward Using the SHIFT key again highlight all the pairs in the results window then click on Save Pair Za BLB 9 Pair Stock System Refresh Find Add List Preferences Stock Pairs Left Code Y Right Code Y TEV Avg WTEV Avg LT AMTD BGCP 2460 03 187 aaao a a a aa ao a AMTD 1481 66 19 AMTD Working 19 128 AMTD 139 AMTD Status 89 37 AMTD AMTD Saving NMR TRAD 30 AMTD SEIC 4 58 26 2365 57 591 39 100 00 591 39 AMTD TRAD z 64 83 3759 16 537 02 71 43 788 36 91 BGCP ETFC 5 18 91 2340 81 468 16 60 00 1059 69 41 Running PnL Ratio You have now completed a back test found good pairs and added them to your home page Feel free to play around with the back tester more you can back test our system on up to 10 years worth of historical data and create any combination of filters that you can think of These results are shown in the back tester for each pair
5. add stock codes this is due to your computer date format not being compatible with PTF date format To fix this issue open your control panel click on global and regional settings then change your date format to MM DD YYYY and re start PTF and try again if that doesn t work try changing your date settings to DD MM YYYY and re start again Also you may wish to change your default currency to and use 2 decimal places If you find your software crashing during start up or a back test you most likely have too many pairs saved in your home page or are back testing too many stocks at once Due to the large amounts of data PTF crunches you have to be aware of your computers limitations If you have any other issues running PTF properly please don t hesitate to contact us at support pairtradefinder com and we will endeavour to help you at the earliest convenience 5 3 Troubleshooting Data Issues By default PTF uses free data automatically imported from yahoo finance Data from yahoo finance comes from CSI data a large reputable data company 99 of the time it is reliable even more so with large liquid stocks With smaller stocks the quality isn t so high this is the give and take of free data If you want 100 reliable clean data you will have to subscribe to a data subscription from lQfeed as per section 3 1 of this user manual If you see large spikes in your price charts one or more of your stocks may have become corrupted
6. Education Hot topics FISE100 FISE250 All Share AIM Sector Indices Dow Jones Nasdag Dax 20 Es Co Ji FTSE 100 F TSE 4m at 12 41pm 5 991 Quotes Get Components for Summary b Components 1 50 of 102 First Previous Next Las Historical Prices COMPONENTS FOR FISE Symbol Name Last Trade Change Volume Ope eS Se AALL ANGLO AMERICAN 2 550 50 p 12 40PM 411 50 0 45 1 507 840 Basic Chart ABF L ASSOCIAT BRIT FOODS 1 090 00 p 12 39PM 4 4 00 0 37 532 878 Technical Charts ABG L AFRICAN BARR GOLD 557 28 piz 37PmM 4 7 28 1 32 533275 News amp Info ADM L 6 00 0 40 149 038 Headlines Saez ae a AGK L 4 00 2 12 242 053 AMEC L AMEC 1 50 0 17 280 105 ANTO L 7 00 0 69 788 798 After creating the new group for London stocks you now have found financial related codes and want to add them as shown below Add Stock x Details Group LSE Financials Delete Create v Codes hsba cpi bt a barc atst oml lloy pru lt lt aS Seperate multiple codes by a comma eg goog mso ddo Gather back data for 10 years Result Added HSBA HSBC HLDG Added CPI CAPITA GRP Added BT A BT GROUP Added BARC BARCLAYS Added ATST ALLIANCE TRUST Added OML OLD MUTUAL Added LLOY LLOYDS BANKING GR Added PRU PRUDENTIAL Other indices you can type in the yahoo quote box to find relevant codes are ADJI Dow Jones Industrial Top 30 US stocks ASPX SP500 In
7. Exchange 3RY BERRY PE Cointeg TEO CNOOC Cointegr Feed Yahoo CHK CHESAPE Cointegr TEP INQ CANADI Cointegr ne 6x Pair Update Freque ORK COMSTO Cointegr e TEA 0 second DVN DEVON E Coint cel Schedule Intraday Updates V lt OG EOG RES Cointegral ST FOREST Cointegral Intraday Update Schedule f Start Time 03 00 PM End Time 04 00 PM i Monday v Tuesday v Wednesday v Thursday v Friday V Saturday Sunday Standard Deviation Lookback days Exit Stretch gt Ratio Lookback 67 days Maximum Days In Trade Stretch Lookback _67 Maximum Active Trades 60 gt Trade value per side To modify the entry trigger level that is how many standard deviations a pair must be away from its mean before our software generates a signal please click on system preferences then on universal layer settings select layer 1 and then click on edit layer By default PTF generates entry signals when the pair is 2 70 standard deviations from the mean You can also add additional layers to the system that is have additional entry signals in the same pair if it keeps on moving away from the mean you could setup the 1 layer at 2 50 stdev ar layer at 2 80 stdev and a 3 layer at 3 10 stdev so you can scale into a trade to improve your cost average this is only recommended for experienced pair traders 5 X Preferences Group Cointes General Options Chart Options St
8. are betting on a rising ratio we are betting on the left code outperforming the right code i e long the left stock short the right stock and vice versa when we are betting on a falling ratio price In the above example of the RSI divergence between the ratio and the RSI price you can see the ratio chart move higher but in the same period the RSI makes a lower high indicating a divergence we follow the direction of the RSI chart so we would be bearish on the ratio thus betting on the left code underperforming the right code Please don t be alarmed if this doesn t make sense we recommend reading the above information several times although it s not needed to use our system effectively however understanding how the ratio chart works will help your pair trading Ideally the best trading signals occur on pairs with the best back testing results and that are very stretched from their mean on no significant news items for example if the pair AMTD OXPS was 3 00 standard deviations and 10 away from its mean on no significant news items this would be a very good trading opportunity not every trade may win but out of 10 or more of these trades you will come out on top The best way to get good at pair trading is the same way to get good at anything else read learn practice persist be patient practice some more then you will get better and you will find your trading nirvana pair trading is just the vehicle that will get you there
9. been around since the invention of markets Jesse Livermore probably one of the most famous traders of all time used pair trading back in the late 1800s he would find a strong stock then short what he called the sister stock Pair trading really took off with large investment banks and hedge funds in the 1980s with the help of computers Today pair trading is still a new concept amongst most online traders however that is quickly changing more and more online traders are beginning to see the benefits of the pair trading strategy The go go days of 1999 where you could wake up and buy yahoo go out for breakfast and come back and have made 3k are gone markets are a lot more sophisticated now and so too must be your trading strategy With pair trading it doesn t matter which direction markets go in up down or sideways you can still profit You risk is greatly reduced as you not subject to large directional price shocks the market can often experience Using pair trading you can safely use leverage to magnify your position size something that is not safe when betting on a one way direction Pairtrade Finder allows you to design test and implement your very own customized pair trading system You can import over 1 000 000 different tradeable instruments from around the world and look for the best pair combinations and then be notified of entry and exit signals for those pairs You can further analyse the trading signals with the help
10. click on the trading signals button Pairlrade Finder V2 96 v a Pair Stock Intra d eS ey Pilot il Trading Signals erage x It will be blank until new trading signals are generated by the software V PairTrade Finder V2 96 Home T 2a B G wa Home Create Back Trading Pair Stock System Analyse View Stock Group Tester Signals Add List Preferences Pair Charts Sg Pilot Home x Backtest for US Stocks Investment Brokerage X Trading Signals X Show signals from date 07 26 2010 yi Date Y Type Y Left co Y LC Y Rightc Y RC Y LY Profi This is what your trading signals window will look like one new trading signals come in you can also sort to show signals going back in time and then using the same E and triangle icons in the columns headers can sort rank and average values ir TradeFinder com Type Y Left cod Wr Tra Signals X ignalsfrom date 06 01 2010 Ga m j H r N H a c lo J wo u L s K O vA rm lu E a tu wu J A T A 4 Jiaj co ow a co u wlolw E p a J tu S S a m T G EAER Cc Q g d m m m m m m m m A a a a a a aio 4 i 077 0272010 rm wn H J H J wlo S m C E ACG 8 1392 XOP 10270 26 rm J mo o loju U o par an E mi hm J J J hm Y H na a a a J a wn co a I a lo m _j m 4 4 l e Internet Connec
11. encourage user feedback to develop our software Pairtrade Finder is a stand alone software program that runs on Windows XP Windows Vista or Windows 7 In section 1 2 we give you detailed instructions on how to install Pairtrade Finder on your computer free for 30 days this is a simple process that should only take you 15 minutes to achieve PTF is a highly customizable tool you can use to generate trading signals on over 1 000 000 tradeable instruments from around the world including stocks options futures commodities and forex it is a true global platform to find unique trading opportunities at a click You can create your own groups categorized by industry sector country or whatever else you can think of and then you can test all instruments within those groups for historical performance of our trading signals You can customize how the trading signals are generated and then save the pairs with the best historical performance to your home screen where you can watch over all pairs at once and receive real time trading signals for After designing your trading system you can use the triggers window to easily see new entry and exit signals on your saved pairs These signals come in during market hours or any other time which you can specify These trading signals can be sent to your email inbox so you don t need to be in front of the computer all day you can receive and trade these signals from your phone with the help of one of many fr
12. in this order Number of trades Biggest winning trade Average correlation Biggest losing trade Total profit Average days trade was open Average profit per trade Total PnL less biggest winning trade Winning of trades Total PnL less biggest losing trade Average winning trade Median profit loss per trade Average losing trade 2 charts shown Running PnL and ratio chart for Average winning losing trade ratio each pair 2 3 Monitoring all your pairs at once Now that you have created your first stock group found and saved good pairs via the back tester you can now view all your pairs on one screen please click on the home icon Cm mmm Se Home SB 8B a Ba B amp B GB Trading Pair Stock System Refresh Find Group Click on Home Add List Preferences Stock Pairs Home Hor US Stocks Investment Brokerage X Code Y Descripti VY Group VY Left Code Y Right Code Y a D aca wee Genres aa AMD aenaran M ee BGCP BGC Part US Stocks Inve AMTD ETFC Home E 3a ra 3 Bae A BBHAB SA Home Create Back Trading Pair Stock System Pair Stock Intra day Edit Pair Delete Refresh Save Excel Reset Group Tester Signals Add List Preferences Charts Charts Spread Chart Layers Prices Layout Export Layout Pilot Options Backtest for US Stocks Investment Brokerage X Home x Drag a column header here to group by that column Leftcod Y LCEY RightY RC
13. it is ultimately up to you the trader whether you make it succeed for you or not 2 7 Customizing your own trading system PTF is designed to be highly customizable flexible and appealing to a wide audience of traders You can customize how the charts are shown in the pair charts window On the front screen please click on system preferences Home 2 2 DLS Home Create Back Trading Pair Stock Group fester Signals Add _ List Pilot Export Pair View Results Results Backtester Then click on the charts tab you can choose what charts are shown where and for what look back period Preferences jm ZS General Options Chart Options s Universal Layer Settings Pair Watching Chart Options Top Left Chart Top Right Chart Bottom Left Chart volatility Ratio RSI Correlation Lookback percent From Mean Bottom Right Chart RSI Lookback You can customize how the signals are generated for each individual group you have to change the parameters click on system preferences then the stock groups tab select a group then click edit Please refer to the below screenshot for definitions of each parameter Uroup Tester DI __ _ _ 4 Add Stock Group lees al ktest for Cointegrated Pairs x Stock Group Details le Y Descripti_ Y Group Description US Stocks Investment Brokerage Wg WTE VY AvwgLlT Y Avg W APA APACHE Coint 0 00 0 00 ci
14. respond to what happens The good thing with pair trading is naturally it has a high win rate around 70 meaning 7 out of 10 trades will produce a profit having a high win rate makes it easier to stick to a strategy That doesn t mean you can t have 3 losing trades in a row and you inevitably will at some stage if you trade long enough What matters is your performance after 10 20 or more trades It s a game of numbers and you need to treat your trading like a business where your losses are your business costs are your wins is your business revenue so long as you collect more revenue than costs after the quarter you have a profitable trading business By default we are raised to believe that if you do something and it is wrong that you must change something This is a natural human reflex that is deeply ingrained in our psyche this is also detrimental to successful trading You have to continue to use the same method even if it isn t working This is where most traders fail with trading systems you can find a trading system with an excellent back test report and equity curve however when the inevitable drawdown comes the traders starts chopping and changing things or even worse completely abandons the method What you need to continue trading through a drawdown is confidence in your trading method The advantage with pair trading is that it is designed around a very robust strategy with sound logic Pair trading is not a fly by night
15. this doesn t affect the trading signals at all only the price chart To fix this issue simply delete the pairs and the related stocks then re add the stocks back into the system If you wish to force a new data grab for all of your pairs please follow instructions from Q amp A thread my price charts have large spikes in them found in our support forum www pairtradefinder com forum Apart from that data is quite reliable and stable in PTF our software runs very smoothly and efficiently If you have any other data issues please don t hesitate to contact us at support pairtradefinder com and we will endeavour to help you at the earliest convenience 6 1 Useful links to aide your Pair Trading www igfeed net pairtradefinder Quality reliable and clean data you can import into PTF www mechtrading com qcollector dtn index htm A cheap and simple program you can use with your Qfeed subscription to be able to download historical data into MSCII or CSV format so you can import into other software programs or a spread sheet You can download data in any time interval 1min 18min 1day etc and going back 10 years for some instruments www yahoo com finance Possibly the best free finance website on the net you can type in just about any code for any instrument around the world and pull up charts and analysis for Use yahoo finance to check for any stock related news that may be affecting the price upgrades downgrades earn
16. 40 0 5 5 H0 Last Trade 39 54 Days Range BA A ee 05 5OWkR 321 A775 10am 12pm 2pm 4pm apap yy wha mange 2 00 47 Trade Time Jul 23 g id 5d 3m m ty 2y 5y mak Change 0 00 0 00 Volume D customize chart Prev Close 39 54 Avg Vol 3m 7 401 690 a Add MET to Your Portfolio Open NIA Market Cap 3243p Set Alert for MET l d Download Data Bid 36 00 x 100 PIE ttm WA Download Annual Report Ask WA EPS ttm 1 20 amp Updates on your phone iv Target Est Add Quotes to Your Web Sit A eat Div amp Yield 0 74 1 90 riaal saunas People viewing MET also viewed PRU MS LNC ALL HD BK Quotes delayed except where indicated otherwise Currency in USD Headlines Fitter Headlines AdChoices Life Insurance is Still Risky Business aie nea nn oe Wey VON QStear in Business events scheduled for the coming week AP Fri Jul 23 Earnings schedule for week of 7 26 10 AP Fri Jul 23 Some Perspective on Bank Loan Loss Provisions tom If you wish to view an individual candlestick chart for a stock please select a stock in the left hand column then click on detail view airTrade Finder V2 96 www PairlTradeFinder com be y v E e D 7 Home EN 7 A m B Py Display Range Last 100 D View In Yahoo Delete Refresh Finance Stock Home Create Back Trading Pair Stock System Group Tester Signals Add List Preferences Pilot Chart Options Home
17. 430 57 928 82 100 00 928 82 TRAD 5 66 27 2725 11 545 02 60 00 697 23 SEIC 5 56 23 1096 79 219 36 80 00 645 04 TRAD 3 59 56 782 62 260 87 66 67 548 85 TRAD 6 55 21 7751 85 1291 98 100 00 1291 98 When it comes to back testing all pair combinations you want to focus on pairs that have shown good results historically this is the best indicator of future performance that we have Using the triangle icon in each column header you can filter results based on your own defined parameters shown below is our back test filtered to show only pairs that make at least 300 average profit per trade Profit vY Profit Per Trade EY aion D TEV AVGEY 6 41 96 1031 68 All 66 67 946 92 137 custom 66 67 1451 28 47 6 65 38 3438 17 Blanks 83 33 826 34 69 8 7042 aaia on ankes 100 00 928 82 i 5 66 27 2725 11 nee 80 00 697 23 6 5 56 23 1096 79 63711 80 00 845 04 228 3 59 56 782 62 536 24 66 67 548 85 31 Then filter for pairs above 300 average profit per trade a Enter filter criteria for Profit Per Trade mer ae Operator gt Greater than Operand 300 00 Add a condition Now that has reduced the shown pairs down to 55 out of all 78 possible combinations all pairs showing in the results make at least 300 per trade assuming 10k invested per trade This has also increased all our other back test statistics lifting the average winning trades to 77 4
18. AM End Time 12 00 AN Monday _ Tuesday Wednesday _ Thursday _ Friday _ Saturday Sunday _ Signal Settings Standard Deviation Lookback 100 days Exit Stretch Ratio Lookback 100 days Maximum Days In Trade Stretch Lookback 100 Maximum Active Trades gt Trade value per side 10 000 00 Using the US stock code spreadsheet click on the financials tab scroll across to the investment brokerage column select the top 10 stocks in there and click on copy EEE B O OOO OS US Stock Codes Compatibility Mode Microsoft Excel Conditional Formatas Cell Formatting Table Styles 0 00 00 0 Paste Paste Special Insert Delete Clear Contents Filter In the create group box in PTF in the codes window right click on your mouse then click paste i Si ee Details Group US Stocks Investment Brokerage Delete Create v Codes Result Seperate multiple Undo Cut Copy Paste Gather back data for 1 years Delete at Select All Right to left Reading order Show Unicode control characters Insert Unicode control character Open IME Reconversion After copying codes change data to 3 years then click on add codes Once finished click close Mh e _US Stocks Investment Brokerage Delete Create v SCHW NMR AMT
19. D SEIC OXPS IBKR ETFC Seperate multiple codes by a comma eg goog mso ddo Gather back data for 2 2 Finding good pairs with Back Testing Now that you have created your first stock group now is time to back test them to find good pairs to save to your home page Please click on back tester from the front screen PairTrade Finder V2 96 www PairlradeFinder com meeigeanata B Home Create Back Trading Pair Stock System Group Tester Signals Add List Preferences Select the group you just created Then click on ok You will see the back testing screen appear next highlight all stocks using the SHIFT key in the left hand column and change the back testing period to 3 years airTrade Finder V2 96 www PairTradeFinder com j s a bb EHBS B 2a B S a Create Back Trading Pair Stock System Refresh Find Save Data PrintTest Export Group Tester Signals Add List Preferences Stock Pairs Pair View Results Results Backtest for US Stocks Investment Brokerage X 4 Years aaea y 5 Years Code Y Descripti V Group 7 Left Code Y Right Code TEV AVG ZY Profit V gt Profit Per Trade tv 6Y Avg WEY Avg LT ZY Avg s l zo f ears 7 Years 8 Years v gt gt TRAD TradeStat US Stocks Inve EH Internet Connection IQ Feed Connection Next click on Find Pairs and please wait for results to start showing in th
20. EY Status Yr RSI Y Volati Y Last Refr Y Stock Group 15 7900 22 4100 Watching 2 Soe ae ee m 15 7900 SCHW 15 2200 Watching 5 1600 KBW 22 4100 Watching 15 7900 BGCP 5 1600 Watching 5 1600 MF 6 3600 Watching 22 4100 MKTX 12 9200 Watching 22 4100 SCHW 15 2200 Watching 49 65 2 28 Pending US Stocks Investment Brokerage k TEP gr eg A I 54 11 2 49 Pending US Stocks Investment Brokerage 51 67 3 97 Pending US Stocks Investment Brokerage 48 04 4 37 Pending US Stocks Investment Brokerage 51 61 4 85 Pending US Stocks Investment Brokerage 52 01 3 48 Pending US Stocks Investment Brokerage Pending US Stocks Investment Brokerage GS Gi Go u a D 9 S 0 0 5 2 5 2n 2 H S a et a a2 in io Watching 15 4400 15 2200 Watching 15 7900 5 4500 Watching 6 3600 12 9200 Watching 5 1600 12 9200 Watching 15 7900 12 9200 Watching 12 9200 15 2200 Watching 5 1600 15 2200 Watching 12 9200 5 4500 Watching 5 4500 15 4400 Watching 22 4100 6 1600 Watching 5 1600 5 4500 Watching 6 3600 6 1600 Watching Pending US Stocks Investment Brokerage Pending US Stocks Investment Brokerage Pending US Stocks Investment Brokerage Pending US Stocks Investment Brokerage Pending US Stocks Investment Brokerage Pending US Stocks Investment Brokerage Ss sss Ss gs Pending US Stocks Investment Brokerage Hill S RR KR KK Pending US Stocks Investment Brokerage Pending US Stocks Investment Broke
21. Mail Server Port Requires authentication P Send Test Email Below is an example of what an entry trading signal sent to your inbox will look like 7 16 2010 Enter Trade GOOG YHOO Long GOOG at 412 38 Short YHOO at 15 75 Layer 1 Below is an example of what an exit trading signal sent to you inbox will look like 7 20 2010 Exit Trade GOOG 419 25 YHOO 14 63 We highly recommend you setup at least audio alerts and or email alerts so you are notified in real time when our software has generated a new trading signal for you to look at and or act on 2 6 Analysing beyond the trading signals In addition to the in built trading signals you can analyse the pair further to pick n choose trading signals if you wish alternatively you could just trade every signal that comes in and still be profitable over time Using the default signal settings trading signals are generated at 2 70 standard deviations from the 100 day mean average of the ratio an exit signal is generated when the pair goes past 1 00 standard deviations i e its goes closer than 1 standard deviation to the mean The current reading on each pair is shown in the column in the home page To analyse each pair further you can select a pair in the home page then click on the pair charts button Pairlrade Finder V2 96 www PairlradeFinder com B a a System Edit Pair Delete Refi Preferences Charts Charts Gick on pair charts Pri g ions yxkerage X Pai
22. Pairtrade Finder PTF Version 2 97 User PairTrade Finder V2 96 www PairlradeFinder com Home B e a AN m 3 Py Display Range 3 Years Home Create Back Trading Pair Stock System Group Tester Signals Add List Preferences Chart Options Backtest for US Stocks Investment Brokerage X Trading Signals x Pair Charts AMTD OXPS US Stocks Investment Brokerage X Stock List XxX MET X x AMTD OXPS Ratio for the last 365 days AMTD OXPS PlusMinus for the last 365 days 1 35 3 50 AMTD OXPS L 1 30 2 50 1 25 1 50 1 20 0 50 1 15 1 10 18 7800 21 1500 19 1200 21 1400 18 5100 21 8100 AMTD OXPS RSI forthe last 365 days AMTD OXPS PercentFromMean for the last 365 days 18 2900 22 8000 58 00 8 00 16 0000 20 4800 we 56 00 16 6700 19 4200 17 5300 19 0100 16 260 Last Ratio 1 02 Last PlusMinus 1 25 54 00 52 00 50 00 48 00 46 00 44 00 42 00 Last RSI 47 79 Last PercentFromMean 3 67 Finder irtrade Professional Stock Trading Software www PairlradeFinder com 1 0 2 0 3 0 4 0 5 0 6 0 Table of Contents Introduction 1 1 Overview of Pairtrade Finder PTF 1 2 The Pair Trading Strategy 1 3 Installing PTF 1 4 Starting PTF Using PTF 2 1 Creating your first group 2 2 Finding good pairs with back testing 2 3 Monitoring all your pairs at once 2 4 Receiving entry and exit signals on your pairs 2 5 Setting trading signal audio and
23. age 40 10 52 Week High 47 75 52 Week Low 32 00 Chart Display Last 365 m Days Internet Connection e IQ Feed Connection If you wish to delete a stock from a particular group select it in the left column and click delete 7 Se er _Pairtrade Finder V296 wy fe airlrade Finder V2 96 acerca _ gt ee Home rN m AN a ae By Display Range Last 100 D Home Create Back Trading Pair Stock System Detail View Yahoo Group Tester Signals Add List Preferences View Finance Pilot Chart Options Stock ay Home x _ Backtest for US Stocks Investment Brokerage X Trading Signals x Pair Charts AMTD OXPS US Stocks Investment Brokerage List Xx MET Xx Code VY Description Y Group Y Displaying from 4 17 2010 to 7 26 2010 AMTD TD Ameritrade Hol US Stocks Inves BGCP BGC Partners Inc US Stocks Inves 46 00 ETFC E TRADE Financial US Stocks Inves IBKR Interactive Broke US Stocks Inves KBW KBW Inc Common St US Stocks Inves 44 00 LFC China Life Insura US Stocks Life I LNC Lincoln National US Stocks Life I LTS Ladenburg Thalman US Stocks Inves 42 00 MET EAEN Malta ina E A T A A MA Below is a screenshot with some tips for what to look for when analysing the pair charts feel free to devise your own interpretations and create your own custom trading rules w e E E gt i o gt rue pe 2 r Tean D Pairlrade Find
24. ar business like ORCL or INTC or compare MSFT call options against the stock of ORCL or INTC The combinations are endless and only limited by your imagination 3 5 Using PTF with Forex You can import foreign currency into PTF These are the spot instruments traded over the counter between large banks and with access offered via online brokers There are many benefits to trading forex including 24hrs deep liquidity steady movements with limited price shocks cheap access and high leverage This can make trading forex very appealing to the online trader As with futures and options you need an lQfeed subscription to import forex data into PTF please refer to section 3 1 of this user manual for relevant instructions In addition to the basic subscription you will need to subscribe to forex data in their premium services section aS ABOUT IQFEED Adding and Subtracting Services To Your t QFeed Account To add premium services select Add Premium Services Pee er areas To add additional exchanges select Add Exchanges aiver PLEASE NOTE You must verify that your software vendor supports the premium services liste cae a below Not all Software Vendors have developed interfaces to these premium services e Trial Now Premium services have a one time 10 activation fee p There is a 20 Surcharge for Market Depth feeds such as Nasdaq Level ll a 20 Surcharge fc EE North American Futures exchanges and a 25 Surcharge for Interna
25. ardware and software pre requirements for installing our software it does not require the latest specifications to run Installing PTF is a 2 step process The first step of getting PTF up and running is to Install Microsoft SQL this is a database program and is where all of the historical and ongoing data is stored PTF automatically updates data into SQL once you have setup SQL you don t need to anything further in regards to updating and storing data If you are running Windows XP you will need to install Microsoft NET and Microsoft SQL 2005 If you are running Windows Vista or Windows 7 you only need to install Microsoft SQL 2008 We recommend using this guide in assisting you to install Microsoft SQL 2008 Once you have successfully installed SQL the last remaining step is to install the PTF software Please download the Pairtrade Finder software from here The Pairtrade Finder installation is very quick and straight forward and upon completion you should see the PTF icon on your desktop Please read on to section 1 3 for instructions on starting PTF for the first time 1 3 Starting Pairtrade Finder Open Pairtrade Finder from your desktop You will see the below screen once open pairrade Finder Activation Activation Welcome to Pairtrade finder To purchase and activate Pairtrade finder please select the purchase button below enter your registration code then select Activate Alternatively select Free Trial below to start o
26. ck against each other click on the fundamental comparison tab at the bottom of the data column oul IAS 0 2 eres 3 reer sss 5 es 11 48 fy 409 ________________________ y___4 _________ fy___ ji 25 87 18 48 5601600 298875 EPS CYr 15 33 16 60 asih Onroad AN Ae EPS NYr 12 73 13 54 WS2 Kr 14 72 21 30 13 85 18 94 PSR 4 40 11 60 Last Volatility 2 45 If you would like to compare two stocks or more against each other you can do so by clicking on the stock list button on the front screen Home Create Back Trading Pair Group Tester Signals Add View In Yahoo Delete Refresh Finance Create Back Trading Pair Stock System Group Tester Signals Add List Preferences v Description TD Ameritrade Hol BGC Partners Inc E TRADE Financial Displaying from 4 17 2010 to 7 26 2010 US Stocks Inves US Stocks Inves US Stocks Inves 64 00 Interactive Broke US Stocks Inves 60 00 KBW Inc Common St US Stocks Inves China Life Insura US Stocks Life I 56 00 Lincoln National US Stocks Life I Ladenburg Thalman US Stocks Inves 52 00 MetLife Inc Com US Stocks Life I MF Global Holding US Stocks Inves 48 00 Manulife Series F US Stocks Life I MarketAxess Holdi US Stocks Inves Nomura Holdings I US Stocks Inves OXPS optionsXpress Hol US Stocks Inves US Stocks Life I
27. d to remove and add fresh contracts with every expiry cycle BO soybean oil C corn GF feeder cattle HE lean hogs RB random length lumber LE live cattle O oats PB pork bellies S soybeans W wheat ZG gold LRC robusta coffee QC cocoa QW white sugar You use the same codes as above and found in the Qfeed symbol look up guide to add into PTF You could also pair stocks against futures for example you could compare gold stocks NEM KGC GG and ABX against the gold futures ZG for some interesting trading opportunities Just add your desired stocks into the same group as your futures contract then use the back tester as already shown 3 4 Using PTF with Options Just as above you will need a lQfeed subscription to import options into PTF Please read instructions in section 3 1 of this user manual on how to achieve this Please specify the NYSE as the exchange when creating a new group to house your option contracts Then use the Qfeed symbol look up guide to locate relevant option codes to import into PTF As with stocks and futures we highly recommend you only trade the most liquid contracts with the case of options this is mostly comprised of the SP100 that is the top 100 liquid stocks you can trade other stocks in the SP500 however the more liquid the option the tighter the spread and lower your trading costs When searching for options in l Qfeed specify OPRA as the excha
28. dex Top 500 US Stocks AGSPTSE TSX Canadian Index AAXIJO ASX200 Australian Index AHSI Hang Seng Hong Kong Stocks AGDAXI DAX30 Top German Stocks AFCHI CAC 40 Top France Stocks You can find an expanded list here Any code you can find in yahoo finance you can import into PTF this opens you to a wide array of instruments along with l Qfeed 600 000 importable instruments makes it possible to literally import over 1 million different instruments into PTF You can even import things like non tradeable indices like advance decline line tick trin etc and compare them to indices futures options or anything you can think to pair with for some interesting results The sky is the limit to possible combinations For example if you wanted to pair the France stock index against the German stock Index you would create a group with NYSE as the exchange and add codes FCHI and GDAXI the same codes used in yahoo finance you could then back test the performance of this pair for the past 10 years With over 1 million importable instruments there are literally billions of possible pair combinations available to you at a click do not under estimate the power of this software to analyse everything if it moves we can pair it and trade it There is no other tool available to you that can do this 3 3 Using PTF with Futures and Commodities PTF is primarily designed for pair trading stocks however you can use to trad
29. e blank window this can take several minutes as the software is crunching huge volumes of data Every possible pair combination from stocks in the left hand window is shown in the results n a rairtiace Finder V2 96 www PairTradeFinder com ee e a a Home amp S S P Cea 23 Es B A p i Lookback 3Years Home Create Back Trading Pair Stock System Refresh Save a PrintTest Export Group Tester Signals Add List Preferences Stock airs Results Pilot lt a Selection Criteria Backtest for US Stocks Investment Brokerage X Find Pairs Code Y Descripti Y Group Y Left Code Y Right Code y TZ3Y AVGEY Profit V ProfitPerTradeS VY WinningSVY Avg Wi y Avg LTZVY Avg W AMTD TD Ameri US Stocks Inve AMTD BGCP 7 42 60 4208 01 601 14 57 14 2460 03 1877 37 BGCP BGC Part US Stocks Inve ETFC E TRADE US Stocks Inve IBKR Interactiv US Stocks Inve KBW KBW Inc US Stocks Inve LTS Ladenbur US Stocks Inve MF MF Glob US Stocks Inve MKTX MarketAx US Stocks Inve NMR Nomura US Stocks Inve OXPS optionsX US Stocks Inve SCHW Charles S US Stocks Inve SEIC SEI Invest US Stocks Inve 1 sweresans ss noneansts savscovieness snssn ans hs sa eass sunset secavenen nensens mi nansasest sassGsascens tpanenorss hase cesesnsenscesanaresansel Internet Connection IQ Feed Connection The r
30. e more exotic instruments aswell We only recommend trading futures commodities options and FX to more experienced traders new traders should learn how to pair trade stocks to begin with before venturing into derivative products To use Pairtrade Finder with futures and commodities requires a data subscription from http www igfeed net pairtradefinder as per section 3 1 of this manual Once you have a lQfeed subscription and the data feed enabled in PTF you can now import futures contracts Please note that some exchanges require different subscriptions with lQfeed the basic subscription does cover most contracts however some require additional exchange subscriptions We will begin with an example of some of the most popular futures contracts available with the basic data subscription from lQfeed To start create a group with NYSE as the specified exchange Add Stock Group i wT Sew le 2s Stock Group Details Description Futures Commodities Exchange Australian Stock Exchange m Australian Stock Exchange Feed London Stock Exchange Enable Alerts NASDAQ Stock Exchange Pair Update Frequency Schedule Intraday Updates Intraday Update Schedule pi cara You will need to use Qfeed symbol look up guide on their webpage to locate relevant contract codes He are some codes for continuous futures contracts that is they don t expire you can front month contracts however you will nee
31. edy won t 4 3 Diversification and Risk Management Paying attention to risk is of upmost importance in trading You have to ensure you won t take a drawdown above your psychological uncle point for most traders this is 30 after a 30 drawdown it becomes mentally hard to continue with the same method Also smart risk management ensures your account won t take a big hit if any one trade goes sour Every now and then you will take a large loss this is part and parcel of trading and something every trader has to deal with The first thing you want to decide is how much of your account you want to place in each trade This is a function of your risk tolerance and the maximum amount of positions you will allow Ideally you will place between 10 30 of your account in each trade For example if you had a 10 000 account you may wish to buy 2 000 stock and short 2 000 at a time With 2 1 overnight margin this will allow you to have a maximum of 5 pair trades open 5 x 4 000 20 000 Next you want a diversified portfolio of pairs look for opportunities in as many markets as possible if you are just trading stocks trade companies from a variety of industries Even better would be to trade multiple asset classes stocks futures options and forex Of course you will need more trading capital and trading experience to trade multiple markets this is something you can work towards You have to be careful with what stocks you trade unlike with fut
32. ee broker applications You can perform additional analysis on the built in trading signals using ratio correlation RSI volatility standard deviation and our own custom from the mean charts With quick links to news items ability to chart 2 instruments easily compare fundamentals gives you an extra added layer of analysis to improve your trading performance PTF is designed to be very user friendly and perform various calculations very quickly all backed up and supported by a team of professional programmers and traders that regularly update the software to stay current with market conditions and changes Please turn to section 1 2 for instructions on how to download a free 30 day trial of PTF If you wish to continue using our software after 30 days you will need to purchase a lifetime license 1 2 The Pair Trading Strategy Pairtrade Finder is built around the pair trading strategy Pair trading involves buying one instrument and at the same time shorting another instrument This leaves you market neutral you re not betting on the underlying direction of the market you re betting on the relationship between 2 correlated instruments Pair trading or statistical arbitrage as it s more commonly known in the investing world is the most popular trading strategy amongst hedge funds as they recognise the reduced risk and ability to produce returns in any market environment that the pair trading strategy delivers Pair trading has
33. email alerts 2 6 Analysing beyond the trading signals 2 7 Customizing your own trading system 2 8 Keeping records and position sizing Using PTF with other markets 3 1 Adding real time data to PTF 3 2 Adding international stock exchanges 3 3 Adding futures and commodities 3 4 Adding options 3 5 Adding forex How to get the most out of PTF 4 1 Optimum performance 4 2 Trading mentality required 4 3 Diversification and smart risk management Troubleshooting 5 1 Installing 5 2 Running 5 3 Data Other Information 6 1 Useful links 6 2 Automating PTF 1 1 Overview of Pairtrade Finder PTF Welcome to the Pairtrade Finder user manual This manual is designed to help you understand the concepts within our software and how to get the most out of it We highly recommend you take the time to read this manual as it could dramatically change your trading so grab a cup of coffee and enjoy learning our highly popular trading software At first glance PTF may seem complex or confusing however after reading this user manual and playing around with the software for an hour or two you will begin to realise its simplicity and powerfulness in creating your own pair trading system There is no other software available that comes close to performing what PTF does Pairtrade Finder has been developed by professional traders in tandem with qualified programmers and has been continually developed over the past several years and is constantly updated We
34. er V2 96 a PairlradeFinder com S a i bal mas m m a Home d a mal Display Range 3Years m ara B Home Create Back Trading Pair Stock System Group Tester Signals Add List Preferences Pilot Chart Options Home x Backtest for US Stocks Investment Brokerage X Trading Signals X Pair Charts AMTD OXPS US Stocks Investment Brokerage X Stock Lit Xx MET X Histo n AMTD OXPS Ratio for the last 365 days AMTD OXPS PlusMinus for the last 365 days Date AMTD OXPS L mee ee onea ido pio a am ase ELN fosiva 17700 205000 1 036 2 5 lla 4 w y nls 19 6000 21 3700 0 182 4 72 05 80 EE iy EE j E 18 7800 21 1500 113 32 Last Ratio 1 02 09 24 2 19 1200 21 1400 140 3 93 09 25 2 18 5100 21 8100 0 36 1 02 09 26 2 18 2900 22 8000 0 1 52 09 29 2 16 0000 20 4800 0 2 69 09 30 2 16 6700 19 4200 A 1 56 1 10 012 17 5300 19 0100 3 4 78 10 02 2 16 2600 18 4100 l History Fundamental Comparison Last RSI 47 79 Internet Connection IQ Feed Connection The ratio chart is probably the most used chart in pair trading shown in the top left hand corner in the above screenshot it is the left stock in a pair divided by the right stock In the above example the latest ratio is 1 02 When the column is showing a negative number the ratio is below its mean vice versa when the column is showing a positive number When we
35. esults shown are based on the in built pair trading system the same signals that you can receive in real time going forward This is real proof that our system works numbers don t lie When you see the last 2 stocks codes paired in this case its SEIC amp TRAD back testing has finished Now let s average the results for every pair in this group click on the E symbol in each column header to do so FairTrade Finder V2 96 www PairlradeEinder com a l ik L lookback 3 stem Refresh Find Save Data PrintTest Export tences Stock Pairs Pair View Results Results Backtester Selection I Right Code Y TRv AVGEY Profit 7 Profit Per Trade VY Wini OXPS 4 3 J Select Summaries SCHW 6 a SEIC 6 E Average TRAD 6 Count SCHW 6 a SFIC 8 E Maximum J TRAD gt E Minimum SEIC 5 v Sum TRAD 3 lt a TRAD 6 J You can do this for each column feel free to average any column you want to get a deeper look at the performance of the group as a whole Ideally you want to focus on groups that show good performance as a whole Shown below is the sum of all trades the total profit from all those trades the average profit per trade and the winning Y Right Code ig 72 AVGRYWT Profit v Profit Per Trade Av Winningk Vv Avg WIRY A SEIC 6 4196 1031 68 171 95 66 67 946 92 TRAD 6 20 29 4855 59 809 27 66 67 1451 28 SCHW 6 6538 3438 17 573 03 83 33 626 34 SEIC 8 7042 7
36. ings take overs won lost contracts litigation earnings guidance CEO appearances www pairtradefinder com forum Our own forum for PTF users to converse with one another Please don t forget to email us after joining to confirm your user name so we can activate it www earnings com A free service for traders to look up earnings announcements dates for US stocks you don t want to place trades right before an earnings announcements this is the place to check for that www interactivebrokers com Possibly the best online broker in the world Available to traders all over the world you can trade over 80 different markets all from one platform IB has the cheapest overnight financing rates and commission fees than other online brokers To see a full list of useful links please visit www pairtradefinder com articles php 6 2 Automating PTF You can have the trading signals in PTF automatically sent to your Interactive Brokers trading account To learn more please visit www pairtradefinder com automated php This concludes the Pairtrade Finder user manual We hope you enjoy using our software and are certain it will be a valuable tool to improve your trading for many years to come You have 30 days to use our software before the free trial will expire you cannot download another free trial as our system recognises your IP address and blocks it You will need to purchase a license key before you free trial is over to continuing usi
37. ng Pairtrade Finder is the only tool available to you that can do this 4 1 Optimum Performance Pairtrade Finder is a powerful program No other software available crunches the same amount of data PTF does on the fly The latest programming technologies have been used to allow this to happen However there are limits on the amount of data you can import and back test at any given time This largely depends on your computer RAM chip speed hard drive speed internet connection and how many other programs you have running on your computer PTF can store and analyse more data than most trading software programs available That is because we use separate 3 party software Microsoft SQL as a database for our data PTF connects to your SQL database automatically and updates it minute by minute and retrieves old data from there for back testing Due the volume of data PTF crunches on the fly you have to be aware of the limitations involved Typically speaking you should be able to easily store 300 pairs in your home page and back test 20 stocks at once This is plenty of capability because you should be creating groups with 20 or less instruments to make sure there are of high correlation so create a new group for each industry or instrument type With default settings each pair will produce on average 2 5 trades per year so with 300 pairs that is 750 trading signals per year Some users have powerful PCs and can comfortably store over 1 000 pair
38. ng our software With every lifetime license you don t just get the best pair trading software available you also get ongoing upgrades and support from a team of professional traders and programmers If you have any questions or suggestions for us please don t hesitate to email us at support pairtradefiner com and we would be happy to help you We look forward to you becoming part of the large and growing online pair trading community The team at www PairTradeFinder com Finder airtrade Professional Stock Trading Software
39. nge in the lookup window Then specify index equity options in the product field and type the stock code of the options you want displayed SUPPORT Symbol Lookup You may DOWNLOAD a complete tab delimited list of all symbols in a txt format file is zip to provide a smaller download File Updated 08 07 2010 06 00 20 AM Search by Name Description Search Text String Records to Display msft 250 records v jai SIC Code gt type in stock code here NAICS Code Filter by Exchange OPRA 347741 v Security Type Index Equity Option v a Search Options __ Show Front Mon Only Futures l i Don t Show Options Show Comb Session Only Futures i Don t Show Spreads Futures Show Continuous Contr Only Futures B Output Symbols Only for cut paste Show E minis Only Futures Total Available Records 666770 Displaying records 1 180 out of 180 total SECURITY LISTED SYMBOL DESCRIPTION EXCHANGE TYPE MARKET MSFT1021H19 MSFT AUG 2010 OPRA IEOPTION OPRA C 19 000 MSFT1021H20 MSFT AUG 2010 OPRA IEOPTION OPRA C 20 000 MSFT1013H20 MSFT AUG 2010 OPRA IEOPTION OPRA You can compare the underlying stock to the options too by adding the stock code into the same group as the options e g you could add all the call options for MSFT into a group then add stock code MSFT aswell to backtest pairs of stock vs options You could get even more creative by comparing the call options of MSFT against a simil
40. ock Groups Universal Layer Settings Cointe Layers Cointe Cointeg Cointe Layer Stretch Buy Dollars Sell Dollars 1 2 7000 10000 00 10000 00 a Edit Layer Layer Details Layer Stretch 2 70 Buy Dollars 10 000 00 Buy Qty 0 Sell Dollars 10 000 00 Sell Qty 0 Remove Last Layer Edit Layer Save Layers Reset to Defaults You may wish to set individual entry layers for each pair for e g 2 highly correlated liquid ETFs you may want to set at 2 00 layer however for a risky small cap NASDAQ biotechnology pair you want may to use 3 00 along with smaller position sizing To edit individual layers for pairs go to the front screen select a pair and then click on edit layers aras 2B Bowe A BEA S A rading Pair Stock System Pair Stock Intra day Edit Pair Delete Refresh Save Excel Reset ignals Add List Preferences Charts Charts Spread Chart Layers Prices Layout Export Layout Pilot Options eevee Pair Stretch nl roup by that Layers AEA E Exit Stretch _1 00 Maximum Days In Trade 100 d 6 4100 6 4100 Layer Stretch Buy Dollars Sell Dollars Buy Qty Sell Qty 20 1000 a ail a Add Layer for OXPS TRAD Layer Details Layer Stretch b 00 Buy Dollars Buy Qty Sell Dollars Sell Qty Cancel 5 5 JU S 20 1000 Add Layer Remove Last Layer Edit Layer Save Layers ks Ir 15 3300 ks Ir A
41. ocks Inves US Stocks Life I Vv B System Preferences Trading Signals Xx Pair Charts AMTD OXPS US Stocks invel View gg Display Range Last100D Chart Options Displaying from 4 17 2010 to 7 26 2010 46 00 44 00 42 00 Detail View Delete Stock Finance ck List A A N Your browser will automatically load the selected stock code in yahoo finance so you can quickly see any recent news items released on a stock YAHOOT FINANCE Dow 0 99 Nasdag 0 00 HOME MET MetLife Inc MET Quotes b Summary Real Time Options Historical Prices Charts Interactive Basic Chart Basic Tech Analysis News amp Info Headlines Financial Blogs Company Events Message Boards Company Profile Key Statistics SEC Filings Competitors Industry Components Analyst Coverage Analyst Opinion Analyst Estimates Research Reports Star Analysts Ownership Major Holders Insider Transactions Insider Roster Financials Income Statement Balance Sheet INVESTING y GA ie ma streaming quotes ON NEWS amp OPINION PERSONAL FINANCE MY PORTFOLIOS TECH TICKER Finance Search Mon Jul 26 2010 7 104M EDT U S Markets open in 2hrs 20mins 0 00 0 00 SR 3 50 0 00 GOOG 490 06 0 00 settings Jul 23 39 54 0 00 0 00 MET MetLife Inc Common Stock nyse 2 H Like 6 MET After Hours 0 00 WA NYA 40 00PM EST
42. of our own custom charts formula s and fundamental analysis No other tool available allows you to do all this so easily We urge you to take some time out of your day and go through this user manual with Pairtrade Finder open the 60 minutes you invest in learning our proprietary software is sure to pay handsome dividends and could dramatically change your trading and your income You may find it easier to print this user manual and have it in your hand whilst learning our software The user manual is designed to flow from one section to another giving you an overview of the software and teaching you how to extract the most value from it 1 3 Installing Pairtrade Finder Everyone is welcome to download a free 30 day trial of PTF This free trial has no feature limitations and you will receive the same support provided to our already large user base We welcome you to test out our support response by sending an email to support pairtradefinder com we answer 99 of all emails within 24 hours If at any time you have trouble installing PTF please email us and we will guide you through the process or we can even remotely connect to your computer and install the software for you right in front of your eyes We provide this service free of charge If you have already successfully downloaded PTF please skip this section Pairtrade Finder is a windows based program and if you have purchased your computer within the last 10 years you will have the h
43. or PTF users Whilst you may be used to getting free data if you re a serious trader there is nothing more important than getting quality clean data a bad tick on free data could costs you hundreds which would have been saved with a simple monthly subscription to real time data IOfeed isn t the cheapest provider however they offer the best value when it comes to markets covered and quality of data hence they have over 80 000 clients Signing up to IQfeed is a simple process To get started complete their online free trial registration form then download their software N about N privacy MI site map WM fee calculator lt I have to tell you though that using the IQFeed API is about the lt easiest and cleanest I have seen for some time Comment from lt Jim s Can I get another account from you I am tired of going Welcome PairTrader Finder Customer to QFeed You are about to find out how nice itis to work with a company like Telvent DTN It all starts with our Sales Reps who will make Sure you are setup with the data you need at the best price possible We know you expect service after the sale too Our 800 Customer Support line is nearly always answered on the first ring we respond to emails within 1 hour and we offer realtime chat on our website You won t find a company more committed to ensuring your Success as a trader About IQFeed f rnaar T Services Symbol Guide Developer Login
44. r Charts y 7 n a re a Ll n i a em keok CI PairTrade Finder V2 96 www PairTradeFinder com Home aN E A m J 2 Display Range 6 Years M Home Create Back Trading Group Tester Signals nces Pilot Chart Options Home x ee Charts AMTD OXPS US ee Brokerage x a xX AMTD OXPS Spread for the last 100 days History Date AMTD OXPS L a e 07 08 2 17 7300 21 5900 0 0 89 07 09 2 17 0900 20 7000 0 1 06 07 10 2 17 7400 21 03 88 eae 07 112 17 2800 214 07 14 2 16 7600 20 7 O7 15 2 16 6500 20 84 07 16 2 18 6300 22 9900 TD OXPS Correlation for the last 100 days 2 80 70 0 O7 17 2 19 4600 23 8100 07 1872 19 0600 23 9700 0 0 89 07 212 18 3200 22 7200 0 0 29 Last Spread 0 35 Last Correlation 86 68 07 22 2 19 6400 24 3300 t 0 26 Joe 07 23 2 19 2200 25 2600 0 0 0 0 0 0 133800 249000 1 2 1281100 1 245500 1 252900 1 BE 0 0 0 0 0 07 31 2 19 9100 24 8100 08 01 2 20 7300 25 4400 08 04 2 19 9500 24 6000 08 05 72 20 9200 25 0900 08 06 2 20 4800 25 5700 0 18 0 28 0 04 0 06 0 82 128 0 0 52 Last Volatility 2 45 Last Ratio 1 02 History Fundamental Comparison Internet Connection IQ Feed Connection In the same pair charts window you can easily compare the fundamentals of each sto
45. r continue your free trial Your name Registration Code Continue Free Trial 26 days remaining Please type in your correct name and email address and then click on free trial Next you will see the below screen i PairTrade Finder V2 96 PairTradeFinder com eegnrzarta B Home Create Back Trading Pair Stock System Group Tester Signals Add List Preferences Pilot Internet Connection e IQ Feed Connection Please read onto section 2 1 for instructions on how to input your first group of stocks into the program to find good pairs 2 1 Creating your first group In this example we will create a group of stocks in the US investment brokerage industry Please click on the create group button p p PairTrade Finder V2 96 www PairTradeFinder com ah Som Home A 8 ara isp Home Create Back Trading Pair Stock System Group Tester Signals Add List Preferences Pilot Then click on create Ho A Seperate multiple codes by a comma eg goog mso ddo Gather back data for years Type a name for your stock group Then choose the New York Stock Exchange Click ok We will explain the other settings in this window further into this manual Ai oc Stock Group Details Description US Stocks Investment Brokerage Exchange XGVA li asic ae E fed vawoo Enable Alerts ae oes oe Schedule Intraday Updates Intraday Update Schedule Start Time 12 00
46. rage Pending US Stocks Investment Brokerage Pending US Stocks Investment Brokerage 3 8S S S Pending US Stocks Investment Brokerage aE E a a 2 OD E a e 2 a A lt Pending US Stocks Investment Brokerage Jy nA OPRAO Re RK Internet Connection e IQ Feed Connection On this home page you can rank and filter for different values the same as the back tester x Home x iat column wole r Status aT 0 70 49 65 2 26 Pendin riteria for Correlation 8 w az 1 Operator J Watching 0 0 44 1 66 1 Essa aca EE AAAA hj Cone ons J Watching 0 0 69 Lif Watching 0 0 17 0 54 Pe eae Watching 0 1 23 3 81 7 ysis Consus J Watching 0 O72 2 62 Watching 0 066 3 02 J Watching 0 0 15 0 52 Watching 0 045 0 67 mit J Watching 0 0 39 1 13 Below is a screenshot with definitions for each column contained on the home page Pair Stock Intra day S harts Charts Spread Chart je x Home x by that column 2 Yv 7 Status Y 7 Y Y MY Correlation Y Sor Y Ratio Y RSIZV Volati Y Last Refr Y Stock Group Y Active 2 28 Pending US Stocks Investment Brokerage E T T EEE T E E E mms esscssssesssssese US Stocks Investment Brokerage US Stocks Investment Brokerage m US Stocks Investment Brok US Stocks Investment Brok US Stocks Investment Brok 123 3 81
47. s on their home page and back test 50 or more stocks at once However if you find the program crashing during start up or during a back test it is likely you have loaded too much data into the software We have found the optimum computer setup to be a brand name PC with 8gb of memory quad core chip and windows 7 64 bit This is not required to use PTF however if you are a serious full time trader you may consider the above Anything over 2gb of RAM and more than 1 5ghz of chip speed should allow you to enjoy PTF functionality without issue With regards to setting the update frequency in group settings be careful using a high frequency like 5 seconds when having more than 200 pairs by default the update frequency is 300 seconds meaning PTF will fetch new data every 5 minutes you can safely decrease this to 60 seconds with 200 pairs on your home page 4 2 Trading Mentality Required Your personal attitude require to succeed in pair trading is the same attitude required to succeed in any other style of trading or anything else in life Every trading system or style will have drawdowns and soft patches that s the nature of the beast There is not one trading system that will produce profit day in day out all the time there will be times when market conditions aren t favourable for a particular trading style Anyone can handle winning it s how you handle losing that matters You can t control what happens you can only control how you
48. s you can see PTF is highly customizable and its very unlikely 2 traders will make exactly the same trades over time You can use and customize PTF in any way you can think some traders can get very creative with their trading rules and combinations some swear by the RSI chart other s buy the dips in up trending ratio charts backed with fundamentals some will only trade pairs in a certain industry etc it really is up to your imagination as to what you can come up with Pair trading is part science part art it is a skill that you can grow and develop over time and before you know it your trading will come natural just like driving a car 2 8 Keeping records and position sizing As a pair trader is it very important you keep detailed records of all trades both simulated and live as this gives you a journal that you can go back too and learn from plus keep track of your PnL It is also critical that you have the right position sizing formula based on your risk tolerance investment objectives and available leverage We cannot give a one size fits all type position sizing formula as every trader is different and use a multitude of brokers which offer different leverage We can give you an outline on how to approach position sizing with the help of our spreadsheet You will find the spreadsheet for download here You will also find in the trading signals window the qty of shares to buy or sell for a trade which is calculated on your defined
49. strategy that most online traders employ it has been around for 100s of years and will continue to do so It is not based on some voo doo combination of the MACD RSI chart pattern and day of the week filters which sometimes may produce good results however trading systems like this aren t based on sound logic and when the drawdown comes you will have no conviction to continue trading it Successful pair trading like anything else in life requires planning persistence and patience You can t expect to become a millionaire overnight it takes work and time to achieve Plenty of practice and record keeping will help you get better at your craft Try and learn as much as possible ask other successful pair trader s questions and look for new ways to improve your trading Pair trading is a method you can use to generate a consistent income and capital growth after you have mastered the basics If you are tied of chopping and changing your trading method or looking for the non existent holy grail or sick of being promoted the latest hot stock then make it your objective to learn the pair trading method to the best of your ability and guided with our software and ongoing support you are significantly increasing your chances of becoming a successful trader and living a lifestyle most only dream about Pair trading does work over time as evidenced by the results in the back tester if you stick to it you will succeed the impatient and gre
50. talled for the first time can be tricky this isn t due to our software rather the strict system requirements set by Microsoft SQL the database program PTF plugs into SQL is very strict because it is mostly used by companies which house sensitive data they don t want employees to have access too You have to be the computer admistrator for full rights to be able to install SQL correctly The most common issue with users installation issues is downloading the wrong SQL version relevant to their operating system please check section 1 3 of this user manual for instructions on how to correctly identify your operating system and the relevant SQL version to install If you are having installation issues please don t hesitate to contact us at support pairtradefinder com and we will respond to you very quickly with a possible solution to your issue If you would like we also offer remote installation of our software on your computer we provide this service free of charge 5 2 Troubleshooting Running Issues in PTF Pairtrade Finder is a very stable software program which has been used for several years amongst thousands of traders Most issues are due to local computer settings or something the user has done out of the ordinary For most issues you can find answers at our support forum in the Q amp A section at www pairtradefinder com forum The most common issue with users from European or other non US counties is not being able to
51. tion 10 Feed Connection 2 5 Setting up audio and email alerts Trading signals will come in during market hours for you to act on instead of being glued to the trading signals window all day you can be alerted to a new trading signal via an audio beep or email To setup audio alerts which is a beeping sound when a new trading signal arrives please click on the system preferences button on the front screen then enable the play sound options click ok 828 b gg rading Pair Stock System ignals Add List Preferences CC o E General Options Chart Options Stock Groups Universal Layer Settings Options Default pair update frequency 300 seconds v Play sound when a buy sell signal is triggered v Play sound when an exit signal is triggered Enable IQ Feed Restart Pairtrade Finder after changing to take effect Use 4 decimal places for stock prices Cancel Reset to Defaults To setup email alerts please click on the pair logo in the top left hand corner of the software then click on alerts configuration lt lt Click on the PTF icon first PairTrade Finder V2 96 2 System Preferences Close All Windows a Add Exchanges Purchase In the alerts configuration window click on the email tab and follow instructions as shown in the screenshot below Email CSV File nie on Send to email johndoe gmail com Outgoing mail settings Outgoing
52. tional Futures exchanges hanges l l sntire Account Add Premium Services Note Not all services are supported by all third party software stion for Sales 0 475 4755 or s iqfeed net As with futures and options please select NYSE in the exchange field when creating a new group to house your currency crosses Shown below are the most liquid currency crosses and in the same format you would add them into PTF For a full list of currency crosses you can add please use the lQfeed symbol lookup guide and select FXCM as the exchange USDJPY FXCM EURUSD FXCM GBPUSD FXCM USDCHF FXCM AUDUSD FXCM NZDUSD FXCM You could add some interesting pairs with FX like the EURUSD against the EUR futures or against the euro ETF code FXE to create riskless arbitrage opportunities Also oil tends to move in line with the euro as Europe is a major importer of oil and central banks consider it a high factor in their inflation models which affect interest rates so you could pair the EURUSD against the crude oil futures contract or against oil ETFs like codes USO OIL or XLE Use the back tester as much as possible to find the best pairs which have performed the best over 1 3 and 5 year periods Make sure you only save the best performing pairs to your home page for monitoring Once again the possibilities of pairs that you can create is never ending you can find unique and exotic trading opportunities that only large hedge funds are used to enjoyi
53. trade size default is size 10 000 In here you can record your trades entry and exit prices and it will automatically calculate the PnL return for the pair trade as a whole You can also use the spreadsheet to calculate how many shares to buy or sell When pair trading our aim to trade dollar neutral that is equal S exposure on both the long and short side For example if you had a 10 000 a c you may wish to place 2 000 in each trade so you would take 2 000 and divide it by the share price to work out the qty to buy sell eg 2000 35 57 shares to buy sell Good pair trading is all about making heaps of small trades with an edge don t ever place a large of your a c in any one trade as in the rare case of a large overnight move this will affect your whole a c negatively Spreading your risk is what we keep you in the game for the long term try and trade a diversified portfolio of pairs from different sectors industry s asset classes whilst never focusing on the results on one trade rather the performance of 10 20 or more trades over time that is what counts 3 1 Getting Real Time Data into PTF To use Pairtrade Finder with real time data for US or Canadian stocks or with futures options forex and commodities requires a data subscription from www igfeed net pairtradefinder Please remember to use this link with our extension as we have an arrangement with lQfeed where the normally charged 50 setup fee is waived f
54. ures and forex which are large liquid instruments some stocks present much greater risks For example a large blue chip company like Walmart WMT has significantly less risk inherent than say a small cap biotechnology company traded on the NASDAQ which doesn t have any revenue and trades only 50 000 shares per day you shouldn t short stocks like this Where possible stick to the largest and most liquid stocks only When trading derivatives use a of your account position sizing rule don t over leverage your account the volatility in your trading account will become unbearable The first goal of any investment program is to preserve your capital next is to reduce account volatility then your aim to grow your capital above the risk free rate offered in bonds Focus on not exposing your account to great risks and the growth will come naturally Good trading is all about being defensive conservative and taking calculated risks Finally be careful of the news surrounding stocks when trading Don t place a trade several weeks before an earnings announcement or make sure you don t have a position during the announcement because if a company surprises on delivered earnings compared to what analysts and market expected the stock price can and often does move large amounts Use yahoo finance and earnings com to check for stock news and upcoming earnings announcement dates 5 1 Trouble shooting Installation Issues Sometimes getting PTF ins
55. x Backtest for US Stocks Investment Brokerage X Trading Signals x Pair Charts AMTD OXPS US dD View Brokerage X Stock List Xx ME Code Y Description Y Group Y Displaying from 4 17 2010 to 7 26 2010 AMTD TD Ameritrade Hol US Stocks Inves BGCP BGC Partners Inc US Stocks Inves 46 00 ETFC E TRADE Financial US Stocks Inves IBKR Interactive Broke US Stocks Inves KBW KBW Inc Common St US Stocks Inves 44 00 LFC China Life Insura US Stocks Life I LNC Lincoln National US Stocks Life I Ladenburg Thalman US Stocks Inves 42 00 A A gt A Next you will see the detailed view window where you can daily trading information and whether the stock is trending or ranging and key support resistance levels Pairlrade Finder V2 96 www PairlradeFinder com m e a Ba B Home Create Back Trading Pair Stock System Open In Yahoo Group Tester Signals Add List Preferences Finance Pilot Stock Displaying from 7 26 2009 to 7 26 2010 48 46 44 42 40 38 36 34 32 pate th yh hr he Pe el eh AD a tl eh lr dra te Ll el a MHANAINN a o erdal er or b AHHH OOMINININ HHHO OONNNN HHHH OO TNININN HHHOO OMNNN HAHAH OO ONNN HHHOO O0 ONNNN AHO OMNNN HHO ANINHA OMNNNN HAHAH Q OMNNN HHO ANN HHOO Stock Details Code MET Description MetLife Inc Com Exchange New York Stock Exchange Last Trade 7 23 2010 Open 0 00 High 0 00 Low 0 00 Close 39 54 Volume 0 50 Day Moving Average 39 44 200 Day Moving Aver
56. xchanges in PTF here To add an international exchange to PTF please click on the pair logo then add exchange ma First click this icon Ss ga PAEO finder V2 96 V2 96 96 System Preferences Close All Windows accom q WN Alerts Configuratio Add Exchanges ay Quit _ I Next scroll through the list and add an exchange in this example we will add the London Stock exchange after adding the exchange when you create a new group select this exchange as shown below Add Stock Group T Stock Group Details Description LSE Financials Exchange Australian Stock Exchange aa bastion Stock Exchange Enable Alerts NASDAQ Stock Exchange Pair Update Frequency New York Stock Exchange Next you will want to add relevant codes for that exchange unless you know your local codes off by heart go to your local yahoo finance page and look for the local index listing in the LSE example this is the FTSE Click on this index and then click on components for stock codes as shown below ihe VVep YAHOO Finance jeepee 0 7 oun MAKE FAST AND SECURE MONEY TRANSFERS TO MOST VISA CREDIT 7 1ND DEBIT CARDS OVERSEAS Terms amp conditions apply ess green Tuesday 27 July 2010 12 56pm UK Markets close in 3 hours and 34 minutes Yahoo Finance Home Investing Your Money Finance News amp Comment My Portfolios UK Activity International Funds Currencies Research amp

Pairtrade Finder (PTF) Version 2.97 User Manual

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