Understand pair trade

Dear analyzers,

I am very new in pair trading,Just i create this image for better understand in pair trade concept.

I don't know its right or wrong.Kindly give your proper reply one who do pair trade.



1) Buy (stock B) sell (Stock A) when C spread goes above Upper Spread.

2) when C Spred between the upper and lower spread "No trade just Wait"

3) Buy (stock A) sell (Stock B) when C spread goes below Lower Spread.

Regards,
Santhosh.