When to include pair trading in your strategy?

00:54 Mins Read

What are the best times to employ the pair trading strategy? This video has the answer.

Transcript

As a beginner to pair trading, it helps to know when this strategy generally clicks. Firstly, pair strategy works best in volatile markets. This is because traders can find multiple opportunities to initiate a trade. Secondly, it's good to try pair trading when you identify two related stocks with a strong correlation, And when they show a temporary divergence in their price movement. And lastly, make sure you have a good understanding of short selling before you try pair trading. So, this brings our module on pair trading to a close. But there’s always more to learn. To check out what else is in store, head to the next module in Smart Money.

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