One of the daily default updates provided by the ETFR Pairs Analysis is the XLF/TLT spread. This is a quickie model with an average excursion time of just 3 days exhibiting a very linear correlation over the past 6 months. Traders are advised to pay close attention to the trigger signals and not dally when the 3 day time stop fires. Virtually all negative result trades can be traced back to ignoring this simple caveat. This setup has delivered 59 trades since Sept 2, 2010 with an average gain of .78%/trade. Using the 3 day fixed bar stop rule that value rises to 1.49% … a substantial improvement. Keep in mind this is a pure pairs trade. AND THE VIX IS GREEN!!!
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