Monthly Archives: December 2015

12-11-15 – Trading Strategy

12-11-15 – Trading Strategy

Current Sell List


No current holdings

Current Buy List


Buy XIV (Inverse VIX) Limit @ $25.00
Sell XIV (Inverse VIX) Limit @ $26.25 (5.00% Profit)
Sell XIV (Inverse VIX) Stop Limit @ $24.00 (4.00% Loss)

Current Holdings


 Real time portfolio updates are now available here

No current holdings

Today’s Updates


VXX (VIX) sold @ $20.25 for a 6.58% profit

Market Snapshot 12-10-15

Volatility in the markets is shrinking quickly while (UGAZ) Natural Gas declines. Looking back I should have held my position from last month in DGAZ (Inverse Natural Gas) as it continued to decline, but I was working from a position of “recovery” trying to earn back losses from previous trading instead of going for the home-run I’ve talked about on newsletters past. This is why it’s imperative you do not mirror my trades, but you trade according to your goals, profit needs, and trading personality.

** The best trades to hold for as long as possible are breakouts to new lows or new highs. New lows are even more reliable than new highs in the current markets **

Some good news though.

VXX (VIX) sold @ $20.25 for a 6.58% profit

I was hoping to see VXX get a nice boos higher but once I saw it hit yesterday’s high of $20.50 and turn around for the second day in a row, I thought now would be a good time to pull out. Sometimes there isn’t a science to your exit strategy and your “gut feel” comes into play. For one, I was negative two out of the 6 days I was in this trade. Today was fourth day in a row it was higher and it’s due for a down day soon as a result.

Now I could just hold on though the down day, but I was already at a good profit level and $20.50 and the definition of a trend is higher highs and higher lows which we haven’t seen for the last two days.

This signaled to me, that we could be slowing down or reversing, so let’s cash in on this smaller profit for the time being and possibly rebuy if we see more momentum.

VXX 12-10-15

 

For now, I just don’t see any new trade setups forming that I can take advantage of. The closest would be BRZU (Brazil) and BZQ (Inverse Brazil) but even though the single day moves are large, the opening gaps are what make up most of the move.

The only real play I can see is to try to get back into VXX on a big pull back for tomorrow which is what I’m going to go for.

YANG (Inverse China) is driving further away from my buy point so I’m going to stop trying to grab a pull back on that one for now.

YANG 12-10-15

Current Holdings with Open Orders for 12/11/15



No current holdings

New Open Orders for 12/11/15


 

Buy XIV (Inverse VIX) Limit @ $25.00
Sell XIV (Inverse VIX) Limit @ $26.25 (5.00% Profit)
Sell XIV (Inverse VIX) Stop Limit @ $24.00 (4.00% Loss)

So I’ve sold out of VXX (VIX) and I’ve made 6+% but what if it goes hire? Won’t I be kicking myself that I could have stayed in longer? Well, not really, because I made good money, but if it does, I’m going to make it work to my advantage.

First, I’m going to make a play if VXX (VIX) hit’s it’s Keltner Top tomorrow. Historically you can see it’s reversed every time when it’s done so. It’s also obeyed it’s upper downward trend line until today and if it’s up again tomorrow that will make 5 days up in a row which is a rare occurrence and is usually proceeded by a sell-off.

So to take advantage of this possibility I will simply buy XIV (Inverse VIX) at a full 7-day ATR limit below today’s close. The 7-day ATR for XIV (Inverse VIX) is 8.27%. This means on average it could go up or down 8.27% tomorrow. If it goes down, then I will be filled.

My target is a small 5% gain which it could easily bounce back to intraday or by Monday if I am filled.

So if VXX (VIX) wants to go higher while I’m not in the position any longer, then I root for it to go much higher! I am putting in a stop at $24.00 just in case the unexpected happens and this goes south on me. It’s more of a safety net and unlikely it will move this far on a 5th day in a row.

Chart of VXX (VIX)

VXX 12-10-15

My order for tomorrow in XIV (Inverse VIX)

XIV 12-10-15