VIX's RSI Uptrend and Crossroads 12/11/2020
VIX at the daily view.
Long story short, I am very angry at Trading View for erasing all my recent trend lines on all 62 charts that I track. An entire month's worth of work was erased as of this morning. Has anyone else faced this issue?
I managed to recreate the VIX chart by memory. The VIX is beginning to get out of its bottoming pattern or its "dance." Finally. However, the VIX is also at the beginning stages of a ramp up. The VIX has a RSI uptrend and it bounced off the trend line supports below... almost perfectly.
This is actually a very emotional phase of the VIX. The ramp up today did not close above the white line nor did it close above the red dotted line. Considering that liquidity is still relatively strong, a lot of newbie VIX traders will likely chase this VIX jump - thinking they can get rich quick. The VIX dance from last week is how VIX shorts get lured in. In this phase, VIX longs are likely to get lured in. The motivation is the same - trying to get rich quick.
Experienced traders know they should NEVER think about getting rich quick - especially with the VIX. That type of gambling mentality will likely lead to bad judgement. One bad VIX trade can eliminate more than 20% of your account in less than a day. Instead, experienced traders know that trading is about building a business. The real "big trade" is actually many, many lower risk trades over the course of time. Trading isn't a sprint. It's a marathon. Sprinting in a marathon is generally not a good idea.
What does this mean for the VIX? The VIX did not close above key pivot points in this round. Most likely, the VIX will retest the supports below again and possibly create another higher low. This might flush out the new VIX traders who went long too early, then spike after they've sold. That's how the VIX works during this phase. It flushes out both sides before an actual spike.
When do you properly long the VIX? When you see a legitimate breakout pattern. Most new VIX traders try to time the bottom. That's how they get washed out. Timing a VXX/UVXY bottom is highly risk. You wait until you see a breakout pattern. You sacrifice an additional 10% of profits for a lower risk VIX long. If you missed out on the VIX spike, then you can react by shorting a big VIX spike - which shorting the VIX will always be the lower risk trade.
So if someone guessed the VIX right, what is the biggest red flag that trader is new and they relied on luck than actual analysis? That newbie trader tries to rub it in other people's faces. That's what children do. Pro traders know they are vulnerable to being wrong. Besides, they're usually too busy planning the next trade than tend to a petty ego.
Long story short, I am very angry at Trading View for erasing all my recent trend lines on all 62 charts that I track. An entire month's worth of work was erased as of this morning. Has anyone else faced this issue?
I managed to recreate the VIX chart by memory. The VIX is beginning to get out of its bottoming pattern or its "dance." Finally. However, the VIX is also at the beginning stages of a ramp up. The VIX has a RSI uptrend and it bounced off the trend line supports below... almost perfectly.
This is actually a very emotional phase of the VIX. The ramp up today did not close above the white line nor did it close above the red dotted line. Considering that liquidity is still relatively strong, a lot of newbie VIX traders will likely chase this VIX jump - thinking they can get rich quick. The VIX dance from last week is how VIX shorts get lured in. In this phase, VIX longs are likely to get lured in. The motivation is the same - trying to get rich quick.
Experienced traders know they should NEVER think about getting rich quick - especially with the VIX. That type of gambling mentality will likely lead to bad judgement. One bad VIX trade can eliminate more than 20% of your account in less than a day. Instead, experienced traders know that trading is about building a business. The real "big trade" is actually many, many lower risk trades over the course of time. Trading isn't a sprint. It's a marathon. Sprinting in a marathon is generally not a good idea.
What does this mean for the VIX? The VIX did not close above key pivot points in this round. Most likely, the VIX will retest the supports below again and possibly create another higher low. This might flush out the new VIX traders who went long too early, then spike after they've sold. That's how the VIX works during this phase. It flushes out both sides before an actual spike.
When do you properly long the VIX? When you see a legitimate breakout pattern. Most new VIX traders try to time the bottom. That's how they get washed out. Timing a VXX/UVXY bottom is highly risk. You wait until you see a breakout pattern. You sacrifice an additional 10% of profits for a lower risk VIX long. If you missed out on the VIX spike, then you can react by shorting a big VIX spike - which shorting the VIX will always be the lower risk trade.
So if someone guessed the VIX right, what is the biggest red flag that trader is new and they relied on luck than actual analysis? That newbie trader tries to rub it in other people's faces. That's what children do. Pro traders know they are vulnerable to being wrong. Besides, they're usually too busy planning the next trade than tend to a petty ego.