The Trend in the VIX
It appears the VIX is bouncing off its lower diagonal support. Historically the VIX does move in diagonals trends, even prior to this one.
This chart is self explanatory from a trading perspective.
- Double bounces off diagonal support have been good long entries.
- Within 1 - 4 weeks of the double bounces there has been large increases in volatility (150%+ moves). This one has capacity for a 60 - 80% move and your risk is 5% to the downside.
- The risk reward is reasonable if you are not using leverage or using low leverage (2x or 3x). In general just don't ever use leverage, trust me.
- If you are going to use leverage, which i don't recommend be careful and recognize and ensure that the the product on your chart is the same as on the platform you are using.
(There are multiple VIX products and they all move a little different). Also please ensure you weight your margin put down 2 :1 or 3:1 to give you ample room to avoid liquidation (stops don't always work on fast moves so we protect against that too).
- Honor the dashed orange line. Strength and Honor!!
- The orange dashed line means you are leaving with a small loss or your exiting the trade with at least 80% of your original position after making some nice profit. Any move higher than this will mean epic recession and whilst a recession is highly likely within the next 12-18 months, that's a long timeframe in a volatility trade....lets not put our emotions through that.
- I would hope that we would have some direction on this trade short term....within 4 to 8 weeks.
Major Caveat - I do not trade the VIX however I will trade this set up and I have been haunted this chart for some time.
I consider this a highly risky trade and I will only be putting down a small percentage of a percentage of my portfolio.
If you are unsure about this trade, please only place a small fraction of what your had already considered.
I could not pass up sharing this as it really does look like a reasonable risk to reward and there is a defined pattern from a TA perspective.
Good luck to you all
PUKA
It appears the VIX is bouncing off its lower diagonal support. Historically the VIX does move in diagonals trends, even prior to this one.
This chart is self explanatory from a trading perspective.
- Double bounces off diagonal support have been good long entries.
- Within 1 - 4 weeks of the double bounces there has been large increases in volatility (150%+ moves). This one has capacity for a 60 - 80% move and your risk is 5% to the downside.
- The risk reward is reasonable if you are not using leverage or using low leverage (2x or 3x). In general just don't ever use leverage, trust me.
- If you are going to use leverage, which i don't recommend be careful and recognize and ensure that the the product on your chart is the same as on the platform you are using.
(There are multiple VIX products and they all move a little different). Also please ensure you weight your margin put down 2 :1 or 3:1 to give you ample room to avoid liquidation (stops don't always work on fast moves so we protect against that too).
- Honor the dashed orange line. Strength and Honor!!
- The orange dashed line means you are leaving with a small loss or your exiting the trade with at least 80% of your original position after making some nice profit. Any move higher than this will mean epic recession and whilst a recession is highly likely within the next 12-18 months, that's a long timeframe in a volatility trade....lets not put our emotions through that.
- I would hope that we would have some direction on this trade short term....within 4 to 8 weeks.
Major Caveat - I do not trade the VIX however I will trade this set up and I have been haunted this chart for some time.
I consider this a highly risky trade and I will only be putting down a small percentage of a percentage of my portfolio.
If you are unsure about this trade, please only place a small fraction of what your had already considered.
I could not pass up sharing this as it really does look like a reasonable risk to reward and there is a defined pattern from a TA perspective.
Good luck to you all
PUKA
Trade active:
Still in the trade.
At present we have a sort of spinning bottom on the daily and a move back up.
If we break and close the daily below the orange line I will exit the trade.
At present we have a sort of spinning bottom on the daily and a move back up.
If we break and close the daily below the orange line I will exit the trade.
Trade closed: stop reached:
Stop triggered at 16.57 (last low). We can revisit the trade once inside the boundaries again.
Comment:
If we get back above the solid purple line, i will re-enter the trade.