TRADERS´ English I July 2014 - page 32

TOOLS
32
www.tradersonline-mag.com 07.2014
NEW PRODUCTS WEBREVIEW SOFTWAREREVIEW BOOKREVIEW APPREVIEW
Pairtradefinder
There is a lot of good charting software on the market, but if you want to use special market-
neutral strategies, it gets difficult. We would like to introduce an English program from Australia that
automatically provides recommendations to buy one stock and sell another after extensive backtests.
How to Use Differences between Stocks Statistically
Installation and Minimum Requirements
There is a 30 day trial period available for Pairtradefinder.
The installation file extracts the SQL-database with a
huge amount of data. The installation is completed in
about 15 minutes.
The backtest is very extensive therefore eight GB and
a Quadcore-Chip is recommended. We tested with four
GB RAM and have to confirm this. If you compare more
than 70 pairs of stocks, you receive an error indication, if
you are running other programs simultaneously. But 70
pairs are a lot.
Start and Working Principle
After starting the user sees an interface with several
menu points in the upper screen area. The strength of
the program is its automatic delivery of signals as well as
» Pairs trading – as the name says – deals with trading a
pair of stocks. One stock will be bought and one stock will
be sold. You will not achieve profits of several hundred
per cent, but the risk is very small. Hedge funds and
professional investors especially use these strategies
to gain continuous profits independent from the market
movement. Jesse Livermore, the best-known trader of all
times, also used this strategy in the 19th century.
The software offers the ability to create a watchlist
after an intensive analysis of stock combinations that
delivers signals in realtime. A money-management
function helps to divide the capital and tells the user when
he should trade correlating stocks and when to close the
position. The hit rate is more than 70 per cent according
to the producer – of course you always have one loser and
one winner in your portfolio, but the difference counts.