Pair Indicators

Market neutral pair trading systems require that you buy one stock (or other instrument) and sell one stock on the same bar.  The PairEntry and PairExit indicators enable you to build a pair trading system in NeuroShell Trader with stocks that follow one another in a stable fashion and cross prices.  

If you have two stocks that follow one another but don't cross prices because the stocks are at different price levels, the ProxyEntry and ProxyExit indicators draw on the NeuroShell Trader's neural nets to create a cointegrated pair, which means that one stock is "computed" as a linear combination of the other.  This technique uses one stock to predict the price of another and then uses the spread between the actual and predicted prices to pair trade the predicted stock and the one used to make the prediction.  You may want to experiment with this proxy method even when the stock or other instrument prices are in the same range.