PairEntry

PairEntry(close, price1, price2, spread)

Parameters

Close = Close (Keep the default value.  It is used to keep track of the stocks)

Price1 = the close of the first stock in the pairs trade (use the other instrument data version of the close)

Price2 = the close of the second stock in the pairs trade (use the other instrument data version)

Spread = the amount of the spread between the two stock prices which must occur before a trade is entered (this may be optimized).

It doesn’t matter which stock is designated as Price1 and which stock is designated as Price2, but it is important that the same stocks be listed in the same order on all of the Long Entry, Long Exit, Short Entry and Short Exit conditions.  Listing the stocks in alphabetical order may help you remember the order.

The PairEntry indicator compares the value of the close, which is different for each chart page, to the value of Price1 and Price2 and determines which stock goes long and which stock goes short.  The values of Price1 and Price2 are also used to compute the spread between stocks in order to determine an entry point for the trade.

Both the PairEntry and PairExit conditions may not be combined with other rules or trailing or protective stops.

For more information on creating a Pair Trading System, refer to Pair Trading Implementation in NeuroShell Trader.