Hereās the why ā and more importantly, the how. Pairs Trading is a market-neutral strategy rooted in statistics and mathematics, not gambling, guessing, or gut feelings.
This is not luck.
This is a quantitative model based on data and logic.
š How Does It Work?
Let me break it down simply:
Pick a Pair: Choose two highly correlated assets (e.g., ETH & ETC).
Monitor the Spread: Track the price difference (spread) between them.
Model the Relationship: Use statistical methods to determine the ānormalā spread range.
Exploit Deviations:
When the spread deviates significantly from the norm,
go long on the undervalued asset and short the overvalued one.
Profit on Reversion:
As the spread returns to normal, the positions are closed ā with a profit.
š Why Itās Not Gambling
This approach is:
ā Backed by historical data ā Grounded in mathematics ā Systematic and repeatable ā Free from emotion and noise
I'm not just randomly buying and selling. Iām not chasing pumps.
Iām a mathematician and a quant, with backgrounds in both Mathematics and Economics, and soon starting my Masterās in Quantitative Finance.
This is research-backed strategy execution, not hope-based trading.
š” In Short:
Iām not trading based on hunches. Iām running a mean-reversion engine built on math. And often ā just like the stats say ā it works.
š Like this post if you're curious. š Because in the next ones, Iāll share:
How I select pairs
What cointegration and z-score really mean
A full working Pairs Trading script in Python
Stay tuned.
Stay smart.
fulldeg
--
Bullish
š° I keep printing money. Curious how?
It's called Pairs Trading ā and it's not luck, it's strategy.