|
Post by walnut on Jan 26, 2017 15:42:17 GMT -5
VIX index is at 10.69. Yeah, that is low.
|
|
|
Post by theMist on Jan 26, 2017 15:44:17 GMT -5
I am fighting that old habit to take smallish profits at end of day. I am sticking with it lol - Your sticking with your old habit of taking smallish profits at end of day OR your sticking with fighting it? Never a bad move to take profits. Small profits every day add up.
|
|
|
Post by walnut on Jan 26, 2017 15:46:57 GMT -5
I'm going to stick with my position and demonstrate this simple new idea works. The time intervals are bigger and I could have some ugly periods.
|
|
|
Post by walnut on Jan 26, 2017 15:48:37 GMT -5
I'm thinking about having two accounts, one for the long term rule and the other a daily trading account.
|
|
|
Post by theMist on Jan 26, 2017 15:52:09 GMT -5
I have a feeling scams are going to be up in AH but could be wrong. just a feeling
|
|
|
Post by theMist on Jan 26, 2017 15:54:28 GMT -5
500M to buy going into close
CNBC just announced.
Took profits
|
|
|
Post by walnut on Jan 26, 2017 15:57:43 GMT -5
Joy deprived for today.. that's the way it goes I have a feeling scams are going to be up in AH but could be wrong. just a feeling
|
|
|
Post by theMist on Jan 26, 2017 16:08:03 GMT -5
Not a bad idea to have two accounts.
But, I'm curious, please explain how you will manage both? If you can be specific that would be great. If you don't mind.
In long term account, are you looking to have a mix of stocks, etfs, short SCAMs, etc.?
And what about trading account? I know you've been averaging in slowly VXX short for longer term. So how much do you have allocated for longer term VXX short trade and what is your method of averaging in? I know you mentioned spot vix as indicator.
|
|
|
Post by theMist on Jan 26, 2017 16:19:17 GMT -5
Also, regarding the above and since this is a long term strategy.
So your shorting VXX now for long term since spot VIX is below 17. Then when it spikes against you and spot VIX skyrockets to over 17, you will cover for a loss? Then you will reshort when spot VIX start to drop back below 17 again. At that point, you will then hopefully be riding the SCAMs back down for a nice profit. Then when spot vix goes back over 17 you will cover for a loss again?
Shouldn't it be the following: If spot vix shoots over 17, you start shorting SCAMs. Then when it drops below spot vix 17 your sitting on profits and hopefully taking profits. But lets assume you don't and then spot vix at some point in time shoots back over 17, then you reshort more. This scenario works better under current market conditions -- Bull market. The periods of low spot vix and contango will keep crushing down the SCAMs and will be very profitable when you look at long term perspective to add only on the pops (in this example when spot vix is over 17).
OR do you simply mean you will only short the SCAMs when spot VIX is under 17 and taking profits along the way. And if spot vix is over 17, you won't touch shorting the SCAMs until it drops back under 17? So under 17 is the green light to short them (and take profits) and red light if spot vix is over 17.
Personally I know of some traders that hold short TVIX for long term and keep it a small percentage of their portfolio. They also hold stocks, etfs, etc. Only when the SCAMs spike hard do they add to their short SCAM position. I believe they use 20 for spot VIX as a threshold. So they hold onto small short TVIX position for years and never cover it AND then only ADD to short position when spot VIX goes over 20.
|
|
|
Post by theMist on Jan 26, 2017 16:37:16 GMT -5
Also, this is something that I always wanted to look into statistically. Since the SCAMs have dropped a ton over the past year (I believe 80-90% profit if you just held short position the entire year), what if EVERY DAY you shorted the SCAMs in premarket (or during regular market hours) and covered your position by market close (or AH close) what would be the results? Which BTW is currently my method of daytrading. But I skip the days where I don't see much opportunity obviously. But what if you were like a machine and did it every day? I'm curious to see what the final result would be.
So far, I've been beating long term strategy of simply keeping a small short VIX SCAM position on and if I had implemented that long term strategy, I would have stayed real small with my short position. I believe it would have returned approx. 90% for the year. I was able to do it in under 3 months and on a larger scale. lol
I have thought of just keeping a short VXX, or UVXY position on at all times in account and then use remaining funds for trading aggressively. The problem is I find that it effects my thinking going into the trading day. In other words, I'm already biased going into the trading day and I find that it could make me emotional.
For example, if I had a short UVXY position on overnight during election night, I wouldn't have been able to sleep and I would have been emotional and wanted OUT of the position first thing in premarket. lol
Instead, I had no positions on and came into the next day with FULL Day trade Buying Power and was loving the selloff and was shorting the SCAMs in premarket and loving it plus I was able to sleep.
Do you see the difference?
So for me personally, I'm going to stick to day trading and occasionally keep a position on overnight. But if I do keep a position on overnight - I will be sleeping with one eye open of course. lol
Of course, in order to implement my strategy, you need to watch markets very closely and can't spend time with those beer drinking you know whats during the day... lol BTW - you can save that for the weekend. lol
ttyl
|
|
|
Post by walnut on Jan 26, 2017 19:41:30 GMT -5
The long term account would strictly be for shorting the scams. Probably just vXX. I would have an alert set and a conditional order to buy back if VIX hits 17. If happens overnight just have to early in premarket. I wish I could say that I had a method for averaging in but I can't think of anything other than just pressing the sell button and going all in. The beginning is the worst, because we are deep into this contango cycle and I could get stopped out before I have made enough this go round. But in my experience, waiting for a "good time" to average into the scams seldom works. You might be waiting for a very long time. Then a separate account where I could try to time the trading on the scams. I don't know which system would work better long term. But I don't want my daytrading to affect my total shorts on the other account so they need to be separate. Not a bad idea to have two accounts. But, I'm curious, please explain how you will manage both? If you can be specific that would be great. If you don't mind. In long term account, are you looking to have a mix of stocks, etfs, short SCAMs, etc.? And what about trading account? I know you've been averaging in slowly VXX short for longer term. So how much do you have allocated for longer term VXX short trade and what is your method of averaging in? I know you mentioned spot vix as indicator.
|
|
|
Post by walnut on Jan 26, 2017 19:44:55 GMT -5
I agree with all that you have written here. All I can say is that the drawdowns on a VIX 17 rule account will be offset by the unbelievable decay. I don't know yet how it is going to play out, might be pretty rough at first. I will say that yes sometimes there are large overnight gap ups, the two largest times I was watching the scams, they began and happened around noon. You need to recognize that the collapse is happening and it might not be any easier while you are sitting at the computer, those are rough days. Also, this is something that I always wanted to look into statistically. Since the SCAMs have dropped a ton over the past year (I believe 80-90% profit if you just held short position the entire year), what if EVERY DAY you shorted the SCAMs in premarket (or during regular market hours) and covered your position by market close (or AH close) what would be the results? Which BTW is currently my method of daytrading. But I skip the days where I don't see much opportunity obviously. But what if you were like a machine and did it every day? I'm curious to see what the final result would be. So far, I've been beating long term strategy of simply keeping a small short VIX SCAM position on and if I had implemented that long term strategy, I would have stayed real small with my short position. I believe it would have returned approx. 90% for the year. I was able to do it in under 3 months and on a larger scale. lol I have thought of just keeping a short VXX, or UVXY position on at all times in account and then use remaining funds for trading aggressively. The problem is I find that it effects my thinking going into the trading day. In other words, I'm already biased going into the trading day and I find that it could make me emotional. For example, if I had a short UVXY position on overnight during election night, I wouldn't have been able to sleep and I would have been emotional and wanted OUT of the position first thing in premarket. lol Instead, I had no positions on and came into the next day with FULL Day trade Buying Power and was loving the selloff and was shorting the SCAMs in premarket and loving it plus I was able to sleep. Do you see the difference? So for me personally, I'm going to stick to day trading and occasionally keep a position on overnight. But if I do keep a position on overnight - I will be sleeping with one eye open of course. lol Of course, in order to implement my strategy, you need to watch markets very closely and can't spend time with those beer drinking you know whats during the day... lol BTW - you can save that for the weekend. lol ttyl
|
|
|
Post by walnut on Jan 26, 2017 21:09:00 GMT -5
By my best calculating, using a VIX = 16 rule this would have made 342% profit over the last 2 years. And that is allowing for several 2% penalties (six times) when the VIX was hanging right around 16. But who knows how accurate my estimate is. I tried to get it close.
BTW- this is rolling your gains and compounding them back into the portfolio after every trade cycle.
Your idea of just selling the scams every morning is interesting and should also be tested. That one would take some work to test but it could be done.
|
|
|
Post by theMist on Jan 26, 2017 21:31:49 GMT -5
By my best calculating, using a VIX = 16 rule this would have made 342% profit over the last 2 years. And that is allowing for several 2% penalties (six times) when the VIX was hanging right around 16. But who knows how accurate my estimate is. I tried to get it close. Good to know. Not trying to give you a hard time my friend but always remember the old adage past performance doesn't guarantee future results. What happens if we get a major correction or enter a bear market? So far the market this year is starting off strong but I am curious to see if we get the big one mid year or end of year. We are now in an interest raising environment and I still believe markets are headed higher to hit those bullish targets but what happens after that ? I think until we hit those bullish targets markets are still very favorable for playing the scams the way we have and as you are proposing with vix 16 rule. As for scams they are overdue in short term for a spike and markets are overdue for a pullback. If market keeps screaming higher and don't pullback now and keeps blowing through resistances and hits those bullish targets then I will see that as a serious danger sign.
|
|
|
Post by walnut on Jan 26, 2017 21:44:56 GMT -5
Well remember, This system has you out of the market as soon as VIX hits 16 (or 17 etc.) VXX will have gone up some but it won't kill you. And you are back in on the way down again, often at a higher price than you got out at.
Oh I know that there is no way to know how will it would work. It is all uncertain. But we did have a pretty major correction in Aug 2015 which lasted until about March of 2016, and this system managed that.
Anyway, not saying that I am sure that it will work. I hope that the correction holds off at least a couple of months to give this time to get a start. Middle or end of the year would be very helpful.
Any pullback in the market at all will test my discipline to stay with it.
|
|