I took a partial profit in RIMM today and moved my stop up to entry level to lock in gains.
Showing posts with label pair trade. Show all posts
Showing posts with label pair trade. Show all posts
Tuesday, August 04, 2009
RIMM Breakout and Pair Trade
Thus far the "pair trade" I outlined yesterday and entered on Friday is a success, as RIMM broke out in a big way today and AMZN (short) hangs out under the "failed breakout" resistance level.
I took a partial profit in RIMM today and moved my stop up to entry level to lock in gains.
I took a partial profit in RIMM today and moved my stop up to entry level to lock in gains.
Monday, August 03, 2009
Pair Trade: RIMM and AMZN
On Friday I went short AMZN and long RIMM. This is a "pair trade" trade using the folling strategy:
1- enter one stock long and one stock short from similar fields.
2- the short stock should exhibit a very bearish pattern, while the long stock a very bullish pattern.
The idea behind this trade is that if the market goes up or down significantly, it will likely take both stocks and you break even or have a slight gain or loss. However, if there is not a major market move, the stocks will move according to their patterns. This could give back significant profits in two trades that end up working out.
RIMM is consolidating post breakout of 50 day moving average. AMZN is a "failed breakout" setup.
1- enter one stock long and one stock short from similar fields.
2- the short stock should exhibit a very bearish pattern, while the long stock a very bullish pattern.
The idea behind this trade is that if the market goes up or down significantly, it will likely take both stocks and you break even or have a slight gain or loss. However, if there is not a major market move, the stocks will move according to their patterns. This could give back significant profits in two trades that end up working out.
RIMM is consolidating post breakout of 50 day moving average. AMZN is a "failed breakout" setup.
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