Using 3 SD bollinger bands and VIX for buy signals

S&P 500SP

Description

⋅ Dec 3, 2014 3:22 AM

SETUP:
This is a setup for identifying buy signals in the market, particularly for S&P 500. The indicators we are using here are Bollinger Bands and the Volatility index, VIX.
SETTINGS:
In the chart above, I have shown two bollinger bands with different settings - one with 2 Standard Deviations from the MA and the other with 3 Standard deviations away from the MA. To get the buy signal, we will use the outer bollinger bands, which is the 3 standard deviations BB.
THE SIGNAL:
The buy signal is trigger when the S&P 500 index hits the lower band of the 3 SD bollinger band and the VIX peaks. For VIX, there is no particular level it should cross, but a relatively high peak, compared to the previous mini-peaks, will be a good signal.

THIS IS ONLY FOR A BUY SIGNAL.

Comments

timwest

⋅ Jan 29, 2015 3:02 PM

Be mindful of hindsight bias - it is dangerous.

seine

⋅ Jan 29, 2015 3:20 PM

thank you i will

timwest

⋅ Jan 29, 2015 3:29 PM

Welcome to the TradingView community! I just wanted to add that defining the peak of VIX is always a challenge and especially so if you use "close-only" charts. Either way, I hope you can post the specific signals as they happen so we can see one work in "real-time", without the hindsight bias. There are other signals in the chart that didn't work (were early at calling a bottom)

lenbclark

⋅ Dec 8, 2014 5:02 PM

Hi, How do I get the VIX on the chart?

Thanks

Len

seine

⋅ Dec 8, 2014 8:16 PM

Type VIX and look for CBOE volatility index. This is not in the indicator but on the chart section.

Trance-Man

⋅ Dec 3, 2014 3:43 AM

Also I am a bit confused with your explanation, you will have a ton of followers if you call this right BUT you can also explain exactly what you re trying to point out, remember not everyone is a TA expert. :)

seine

⋅ Dec 3, 2014 4:09 AM

Sorry man, i will try my best to explain. I will redo the text below the chart.

seine

⋅ Dec 3, 2014 4:19 AM

Please see the explanation now. Let me know if that one makes more sense.

Trance-Man

⋅ Dec 3, 2014 4:52 AM

No prob dude, but yah I might just be tired I think, not following exactly, prob me.. Where do you see, % wise, the S&P going price wise, and the VIX from here, are you expecting now a pullback in the S&P and a pop upwards on the VIX?

seine

⋅ Dec 3, 2014 4:55 AM

The purpose of this chart is not to tell where the market is headed now. It is just to show the setup that captures the big moves in the market.