In part two of their piece on pairs trading, Pete and Katie build a checklist for how to identify, execute and close a pairs trade.
Using the Euro-Sterling pair as an example, the duo explains the importance of "outright" assumptions vs. a pairs extreme, how to set up the proper ratio for these spreads and how to use expected moves to set expectations around trade P/L.
Be sure to download the slides for a quick guide on this important futures trading strategy!
Get the expected moves of futures products and popular pairs. Download Motion in the Markets
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