Posted by ashplant on 24th of Sep 2014 at 06:09 pm
I thought the signal is created by the second day candle &
then depending on where it closes you trade ie long/ short the
following day. By this post you have traded a rally from just one
candle closing outside of the bowl linger band & so is this not
wrong?
The signal happens when the VIX closes outside the band
(yesterday) and back inside (today). What you normally see is a
strong rally on the SPX the day it closes back inside (today). The
VIX by itself is not my preferred trigger (since I focus on the
instrument I'm trading for my triggers) but a setup (when it closes
outside BB's) to watch the SPX closely for a TRIGGER which occurred
TODAY. The SPX 10 minute shows a trendline break (TRIGGER
LONG) or on the daily chart a move above 50% of yesterday's range
(discussed below). This is how I use the setup versus waiting
until the close. Often times this signal (when confirmed)
will lead to a extended rally but I choose to enter as explained
above.
Posted by ashplant on 25th of Sep 2014 at 03:53 am
So essentially you are guessing the direction of the market if
you enter the trade on the second day. What if during the day it
looks like the vix will close back inside hence a strong mkt and
then in the last hour or two the mkt sells of hard and the vix
closes outside. Now you are in a wrong trade and actually should be
short the mkt. Surely as per your rules below you should wait for
the 3rd candle to then confirm the trade as the second candles
CLOSE only creates the signal?
Ashplant...I just saw your reply as my ISP has been down since I
posted last night. Again, my statement is completely valid...I buy
based upon a TRIGGER on the SPX not the VIX with a stop in place.
Simple answer, if my trigger is hit it's very rare to reverse back
down the same day. Send me a private message and I will
provide you with my phone number to discuss properly.
You're missing the KEY POINT and that is that I'm focused on the
SPX for the trigger not the VIX. The VIX setup simply tells
me to be ready for a possible reversal and thus have a trigger
price set for the SPX.
dunno why just do . so ashplant re-read steves reply
below, slowly, you are so far off base it is laughable.
but, your post provides good food for thought for me and
probably many others. this is going to sound like i am making a big
deal out of not much but the biggest thing i think i have learn't
in 15 years of trading ( it took me about 12 to recognize it) is
that THERE ARE NO WRONG TRADES, if you are doing it properly. Sure
there are many losers as well as winners but if you are trading to
a set of rules they are all good trades, some win some lose.
trading is about probablilities and nobody wins all the time AND
you only need to win half the time if you have a good plan ,
and that is enough to do very nicely thank you. if you can win 60
or 70% of the time and stick to your plan you should make a
fortune. if all the trades you make are by your rules then
none of them are
wrong,some will just lose money and some will not.
to sway the probability in our favour we use technical analysis,
and if there are a few , rather than one , bit of analysis that
indicate the same outcome this helps.
steve points out that he uses the vix bb indicator to put him on
alert to a possible spx reversal but that his TRIGGER comes from
the chart of the spx. so he has two separate bits of analysis that
indicate the same possible outcome, strengthening the case. it
could still all go to s#!t, it often does, but the odds have been
narrowed a bit in our favour. If you take this trade 10 times it
will probably work in your favour 6 or 7 times out of 10. with
reasonable money management that is good bucks.
so anyway in all my time (f@#K i feel old now) haha, i have
never run across a couple of blokes who take more time and make
more effort to teach us , genuinely, so don't argue with em, by all
means discuss and question til you understand, and then thank
them.
morgan, I think Ashplant's question is reasonable. The rules on
the VIX chart do not indicate a confirmed long signal nor do they
say anything about looking at the trading instrument for an earlier
signal. If I understand Steve he's saying it's OK to "jump the gun"
on the VIX confirmation IF your trading instrument gives a signal
which the VIX signal has given you a heads up to watch for. Most
likely you would then have a better entry on the trade IF the VIX
confirmation followed. Since today it so far did not and VIX is
back outside the BB that is another reason to be out of the trade
although obviously it would have been better to be out or take
partials based on divergence and failure to penetrate the daily
9ema on SPY for example or other triggers such as losing the
midpoint of yesterday's candle (198.60 on SPY) as per the
newsletter. Steve -- am I understanding correctly?
bkoout...I have explained how I trade this signal ad nauseum and
will again this evening. The overall VIX signal and confirmation is
described on the chart and I discuss how I (PERSONALLY) trade the
setup. I bought and sold (50%) yesterday at the 20 day
MA.
Today, I stopped out on the balance and reversed short on a
break of the 50% range as I discussed. Simple plan but quite
effective. I will consider scaling out of some shorts intraday
since I'm a hybrid trader. Likely will cover some around the
previous lows and swing the balance with a trailing stop.
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VIX Signal Led To Nice Rally
Posted by steve on 24th of Sep 2014 at 05:04 pm
$VIX - Chart Link
I thought the signal is
Posted by ashplant on 24th of Sep 2014 at 06:09 pm
I thought the signal is created by the second day candle & then depending on where it closes you trade ie long/ short the following day. By this post you have traded a rally from just one candle closing outside of the bowl linger band & so is this not wrong?
VIX Reply
Posted by steve on 24th of Sep 2014 at 06:39 pm
The signal happens when the VIX closes outside the band (yesterday) and back inside (today). What you normally see is a strong rally on the SPX the day it closes back inside (today). The VIX by itself is not my preferred trigger (since I focus on the instrument I'm trading for my triggers) but a setup (when it closes outside BB's) to watch the SPX closely for a TRIGGER which occurred TODAY. The SPX 10 minute shows a trendline break (TRIGGER LONG) or on the daily chart a move above 50% of yesterday's range (discussed below). This is how I use the setup versus waiting until the close. Often times this signal (when confirmed) will lead to a extended rally but I choose to enter as explained above.
So essentially you are guessing
Posted by ashplant on 25th of Sep 2014 at 03:53 am
So essentially you are guessing the direction of the market if you enter the trade on the second day. What if during the day it looks like the vix will close back inside hence a strong mkt and then in the last hour or two the mkt sells of hard and the vix closes outside. Now you are in a wrong trade and actually should be short the mkt. Surely as per your rules below you should wait for the 3rd candle to then confirm the trade as the second candles CLOSE only creates the signal?
Ashplant...I just saw your reply
Posted by steve on 25th of Sep 2014 at 09:18 am
Ashplant...I just saw your reply as my ISP has been down since I posted last night. Again, my statement is completely valid...I buy based upon a TRIGGER on the SPX not the VIX with a stop in place. Simple answer, if my trigger is hit it's very rare to reverse back down the same day. Send me a private message and I will provide you with my phone number to discuss properly.
You're missing the KEY POINT and that is that I'm focused on the SPX for the trigger not the VIX. The VIX setup simply tells me to be ready for a possible reversal and thus have a trigger price set for the SPX.
Title: so i feel like
Posted by morgan8 on 25th of Sep 2014 at 08:16 am
dunno why just do . so ashplant re-read steves reply below, slowly, you are so far off base it is laughable.
but, your post provides good food for thought for me and probably many others. this is going to sound like i am making a big deal out of not much but the biggest thing i think i have learn't in 15 years of trading ( it took me about 12 to recognize it) is that THERE ARE NO WRONG TRADES, if you are doing it properly. Sure there are many losers as well as winners but if you are trading to a set of rules they are all good trades, some win some lose.
trading is about probablilities and nobody wins all the time AND you only need to win half the time if you have a good plan , and that is enough to do very nicely thank you. if you can win 60 or 70% of the time and stick to your plan you should make a fortune. if all the trades you make are by your rules then none of them are wrong,some will just lose money and some will not.
to sway the probability in our favour we use technical analysis, and if there are a few , rather than one , bit of analysis that indicate the same outcome this helps.
steve points out that he uses the vix bb indicator to put him on alert to a possible spx reversal but that his TRIGGER comes from the chart of the spx. so he has two separate bits of analysis that indicate the same possible outcome, strengthening the case. it could still all go to s#!t, it often does, but the odds have been narrowed a bit in our favour. If you take this trade 10 times it will probably work in your favour 6 or 7 times out of 10. with reasonable money management that is good bucks.
so anyway in all my time (f@#K i feel old now) haha, i have never run across a couple of blokes who take more time and make more effort to teach us , genuinely, so don't argue with em, by all means discuss and question til you understand, and then thank them.
thank you steve and matt.
morgan, I think Ashplant's question
Posted by bkout3 on 25th of Sep 2014 at 10:09 am
morgan, I think Ashplant's question is reasonable. The rules on the VIX chart do not indicate a confirmed long signal nor do they say anything about looking at the trading instrument for an earlier signal. If I understand Steve he's saying it's OK to "jump the gun" on the VIX confirmation IF your trading instrument gives a signal which the VIX signal has given you a heads up to watch for. Most likely you would then have a better entry on the trade IF the VIX confirmation followed. Since today it so far did not and VIX is back outside the BB that is another reason to be out of the trade although obviously it would have been better to be out or take partials based on divergence and failure to penetrate the daily 9ema on SPY for example or other triggers such as losing the midpoint of yesterday's candle (198.60 on SPY) as per the newsletter. Steve -- am I understanding correctly?
bkoout...I have explained how I
Posted by steve on 25th of Sep 2014 at 10:18 am
bkoout...I have explained how I trade this signal ad nauseum and will again this evening. The overall VIX signal and confirmation is described on the chart and I discuss how I (PERSONALLY) trade the setup. I bought and sold (50%) yesterday at the 20 day MA.
Today, I stopped out on the balance and reversed short on a break of the 50% range as I discussed. Simple plan but quite effective. I will consider scaling out of some shorts intraday since I'm a hybrid trader. Likely will cover some around the previous lows and swing the balance with a trailing stop.