DayTrading the VIX/S&P

[stv17]

I've read about a trader that all his trades are TVIX/UVXY.
Basically. since these 2 ETF's go the opposite way of the S&P, so when it goes up than he shorts the VIX and when the S&P goes down he longs the VIX.

Is this a valid and profitable strategy ? if yes, why not develop a algo that does this for you?

 

[qlai]

Are you saying he holds positions in both at the same time?

 

[wrbtrader]

I've read about a trader that all his trades are TVIX/UVXY.
Basically. since these 2 ETF's go the opposite way of the S&P, so when it goes up than he shorts the VIX and when the S&P goes down he longs the VIX.

Is this a valid and profitable strategy ? if yes, why not develop a algo that does this for you?

Is there a reason why you do not want to backtest that strategy to see if its valid/profitable instead of asking others ?

Seriously, wouldn't you rather put your hard earned money on your backtest results and then simulate trade the strategy to determine you're able to apply it correctly in simulation trading environment versus putting your hard earned money on the strategy based upon the opinions of anonymous traders at a forum ???

Yet, even after you did do the work (backtest, simulate trading) yourself...there's still no guarantee you will apply it properly with real money. That's were the trader psychology or mental game comes into play if you're not automated because real money trading will play tricks on the mind instead of the tricks not showing up in backtest results/simulation trading.

If you decide to be a lazy trader via trading that strategy with real money that you do not want to backtest nor simulate trade...ask that trader to send you buy/sell signals.

P.S. Do the work (backtest, simulate trade)...you'll have an advantage than most.

wrbtrader

 

[stv17]

Are you saying he holds positions in both at the same time?

No...he scalps his trades

 

[El OchoCinco]

if yes, why not develop a algo that does this for you?

Yes please do and get back to us on how it does.

 

[qlai]

he scalps his trades

Is this a valid and profitable strategy ? if yes, why not develop a algo that does this for you?

By valid, you mean - can it be profitable? Sure any strategy can be made profitable, just not always profitable. There is LOTS of noise in intra-day moves, so it's hard to find real edges, imho. If you don't have that real edge, you can still make money by getting a feel for the market you trade, but that is very hard (impossible) to put into formulas.

 

[stv17]

Is there a reason why you do not want to backtest that strategy to see if its valid/profitable instead of asking others ?

I'm pretty new to trading and i'm not familiar with back testing.

 

[lindq]

I've read about a trader that all his trades are TVIX/UVXY.
Basically. since these 2 ETF's go the opposite way of the S&P, so when it goes up than he shorts the VIX and when the S&P goes down he longs the VIX.

Is this a valid and profitable strategy ? if yes, why not develop a algo that does this for you?

While there is money to be made trading VIX derivatives intraday, I suggest that (1) Scalping is not likely to provide consistent profits given how quickly and irrationally these instruments move in very short time frames, and (2) These instruments are definitely not appropriate for new traders.

 

[qlai]

(1) Scalping is not likely to provide consistent profits given how quickly and irrationally these instruments move

I agree with all the other points you made, but above is exactly what we look for.

 

[wrbtrader]

I'm pretty new to trading and i'm not familiar with back testing.

You can use Elitetrader.com forum "search" to look up the words back testing or use Google to become familiar with those words.

You can backtest via codes or manual. Regardless, you will need access to historical data to do your backtesting. If you don't want the research it that way...another option is to find others that have backtested what you're talking about and ask them if you can review their backtesting results.

Always keep your backtest results...you never know when you will need it again especially when market conditions change...its always changing.

Last of all, if you're not familiar with "simulator trading"...just contact your broker and ask them about it. Only use a simulator by your broker to test that trader's strategy of trading the TVIX/UVXY.

Don't know your background in "algo design/trading" but if you're new to that too...it may take a few years to get going with that too. Yet, if you say you're already familiar with algo trading...you should then be familiar with backtesting.

wrbtrader