With so many trading combinations at our disposal, how could you possibly know what the best pairs trade to take is? Or even the best way to implement it?!
Don’t worry, folks. That’s why WealthPress Senior Strategist Roger Scott is here…
As the name implies, a pairs trade is an approach that involves coupling a long position with a short position in two stocks with high correlation. It uses statistical and technical analysis that lets traders find potential profits during virtually any market condition.
Roger has collected information and data on the best pairs trade to take, along with tips on how he’d carry out the trade and some basic terms you should understand.
The Best Pairs Trade for Next Quarter
On Sundays, Roger blocks out two to three hours to complete my stock market research for the beginning of the trading week. He looks at analyst ratings to see what they are saying about particular sectors, stocks and companies.
He typically looks at stocks like Bank of America Corp (NYSE: BAC), Goldman Sachs Group Inc. (NYSE: GS) and JPMorgan Chase & Co. (NYSE: JPM).
What Roger stumbled across is cool, and something Roger doesn’t typically talk about.
It’s called a pairs trade (or linked trades).
Either way you look at or call it, you’re simultaneously buying a strong stock and selling a weak one. That’s all there is to it, folks.
Not only will it help you take advantage of the current market cycle, but also the investment behavior of people during the COVID-19 climate… and teach you how to use relative strength in your trading.
Watch today’s video and then leave a comment below, sharing your thoughts on pairs trading. Have you ever implemented a pairs trade before, and what were the results? Did you like the trade I just walked you through? Does it seem like an investment you’d like to make?
