Low-risk, Predictable Speculation on VX Futures
Updated
A lot of traders I talk to are afraid of trading volatility products.
When I watch trading shows even the professionals are afraid of trading the VIX because they don't understand it.
I find that funny because as someone who has experience trading all asset classes and analyzing a dozen casino games I find the VIX to be the most mean-reverting asset.
The more an asset returns to its mean price, the more predictable it is, the more risk you can allocate to that product.
For instance the safest bet in the casino is around 48% probability of success. That bet is betting red or black in Roulette.
For investing there is no safe bet. We know that if you spread your dollars around in the S&P500 over the last 30 years, you would have done well but no one can predict which 10 stocks would have outperformed over the last 10 years.
I have probably analyzed several dozen indicators over several dozen securities across all the asset classes: crypto, stocks, bonds, etc.
For the last 30 years the VIX has had a flat bottom price average around 14-16 dollars.
Its top is around 30-40 dollars.
Comodities, equities, currencies, etc they all have black swan political or weather events. They are influenced by fear and lack. Why not trade the vehicle that correlates with fear? that's the VIX.
Humans are predictable. They will always go through cycles of fear.
Now we know the asset class but how do we measure the mean? I chose the Directional Trend Index but with a twist. the DTI takes 3 values to create the mean trend lines( R, S, and U) . I cycled through 1 to 50 permutations in all 3 values. It turns out that a reverse or descending numerical input is the best performing.
Now we have the asset: VX Future
The strategy: Reverse DTI with any descending number of your choice (10,5,3)
The indicator: VIX chart 4 hours: I was told by floor traders that the big money banks use 4 hour and daily charts for analysis. So I always trade on this to swim along the trend of the big fish.
So I open up a 4 hour chart of VIX, apply the pine script of DTI , update the R S and U values, and create a strategy.
It returned over 100% profit in the backtesting. I tried linking my chart screenshot for proof . hopefully this worked. this is my first post. :-)
VIX
I traded this on traderspost automated trading with 50k paper money and I made over $35000 in 90 day free trial.
Reach out to me if you would like to schedule a call for more help.
When I watch trading shows even the professionals are afraid of trading the VIX because they don't understand it.
I find that funny because as someone who has experience trading all asset classes and analyzing a dozen casino games I find the VIX to be the most mean-reverting asset.
The more an asset returns to its mean price, the more predictable it is, the more risk you can allocate to that product.
For instance the safest bet in the casino is around 48% probability of success. That bet is betting red or black in Roulette.
For investing there is no safe bet. We know that if you spread your dollars around in the S&P500 over the last 30 years, you would have done well but no one can predict which 10 stocks would have outperformed over the last 10 years.
I have probably analyzed several dozen indicators over several dozen securities across all the asset classes: crypto, stocks, bonds, etc.
For the last 30 years the VIX has had a flat bottom price average around 14-16 dollars.
Its top is around 30-40 dollars.
Comodities, equities, currencies, etc they all have black swan political or weather events. They are influenced by fear and lack. Why not trade the vehicle that correlates with fear? that's the VIX.
Humans are predictable. They will always go through cycles of fear.
Now we know the asset class but how do we measure the mean? I chose the Directional Trend Index but with a twist. the DTI takes 3 values to create the mean trend lines( R, S, and U) . I cycled through 1 to 50 permutations in all 3 values. It turns out that a reverse or descending numerical input is the best performing.
Now we have the asset: VX Future
The strategy: Reverse DTI with any descending number of your choice (10,5,3)
The indicator: VIX chart 4 hours: I was told by floor traders that the big money banks use 4 hour and daily charts for analysis. So I always trade on this to swim along the trend of the big fish.
So I open up a 4 hour chart of VIX, apply the pine script of DTI , update the R S and U values, and create a strategy.
It returned over 100% profit in the backtesting. I tried linking my chart screenshot for proof . hopefully this worked. this is my first post. :-)
VIXI traded this on traderspost automated trading with 50k paper money and I made over $35000 in 90 day free trial.
Reach out to me if you would like to schedule a call for more help.
Note
Not sure why the net profit says 67%. My chart shows 130%.
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