GoldAndSilverPairTrading is a statistical arbitrage trading bot designed for pairs trading between gold (XAUUSD) and silver (XAGUSD). Developed by a Financial Technology university student, it applies academic quantitative finance concepts to live market execution. The bot exploits the strong correlation and mean-reversion patterns between these two commodities using Z-score divergence signals to detect spread deviations from equilibrium.
Key features include a market-neutral approach that avoids trend-following, martingale, or grid strategies; dynamic stop-loss and take-profit levels adjusted for volatility; and correlation and Average True Range (ATR) filters to ensure trading only under strong, liquid market conditions. Backtesting over three years with a starting capital of $5,000 demonstrated a net profit of approximately $439,768, a profit factor above 1.3, and a win rate of 61.7% across 1,298 trades. Long trades contributed the majority of profits with a profit factor of 2.0, while short trades showed a profit factor slightly above 1.0.
This bot is optimized for high-frequency trading and is suitable for traders interested in commodity pairs arbitrage strategies focusing on gold and silver markets.