san diego
Experience: Intermediate
Platform: FXCM MarketScope, NT, Interactive brokers, AMP
Broker: FXCM, Interactive Brokers
Trading: FOREX, IWM, SPY, XLE, NQ
Posts: 228 since Apr 2010
Thanks Given: 72
Thanks Received: 145
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ThinkorSwim has pairs trading on one of their chat rooms and they use an indicator which compares the price of the stock to the mean and entries are at the extreme of the difference. They also have a correlation indicator and only trade on pairs that are currently correlated (over 80 percent and preferably 90 percent). If mean reversion works, the price should return to the mean. The problem I have found with thinkorswim is they don't calculate the pair bars using tick by tick data so the High/Low values of a bar can be really inaccurate. Thus, in thinkorswim, they only use the close of the bar to draw support lines. Does anyone know a list of data vendors that provide true tick by tick pair data? This is actually more important than any indicator.
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