Wednesday, November 04, 2009


I've added a new element to the right side of the blog panel to keep my daytrading posse amused. It's based on a FreeStockCharts (FSC) chart and uses GE and the VXX to signal VIXEN trades. The chart is set on 2 minute bars and tracks 45 bars or 90 minutes. Keep in mind that the VXX crosses have to be executed relatively close to the actual cross since scaling factors will literally move the cross point forward as time elapses. No looking back here.
One of the problems with FSC is that there is no live feed for the VIX or the NYAD, just EOD.
We can resolve that problem for the VIXEN trades by using VXX as a proxy for the VIX. I've mentioned the differences between the VIX and the VXX previously so won't rehash old ground here. Suffice to say that VXX actually trades at a market price, while VIX is a statistical value.
From a technical viewpoint, the VXX tends to display a bit more short term volatility than the VIX, but viewed on our little gadget, it's barely noticeable. The VXX is shown as a white line.

Here's a little snippet VIXEN trade from Monday's session, and displays how simple (and effective) these scalps can be. If you undertake this strategy you must pay attention to the trades or have fixed stops in place to protect your capital. Things can happen fast on these trades. My typical expectation is a trade duration that may last 10 minutes to 30 minutes, and getting caught on the wrong side of these trades can be costly.

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