VIX and TICK - how to use and for what ?
- Thread starter richk
- Start date
"TICK should be used for daytrading only. Never saw anyone using it for swing or long term trading."
If I'm not mistaken, this is what Mark Cook uses in his custom indicator - CTI. He then position trades(OEX options?) off the index after an x amount of cumulative readings over a period of x days.
Matbe if 98% of the traders use it short term and everyone is suggesting that it is "only for daytrading" means that he has probably discovered an "edge." You know, do opposite of the crowd, think outside the box...
If I'm not mistaken, this is what Mark Cook uses in his custom indicator - CTI. He then position trades(OEX options?) off the index after an x amount of cumulative readings over a period of x days.
Matbe if 98% of the traders use it short term and everyone is suggesting that it is "only for daytrading" means that he has probably discovered an "edge." You know, do opposite of the crowd, think outside the box...
Not True, We use it for Timing for short & intermediate term, points, there is a way to use the TICK on daily time frame to time swings in the market...Chris
I agree with you Reverend, Mark Cook uses something but nothing that the average person would use, its his own thing, BUT we use a 5 & 10 day moving average of the TICK, Linda & I been using this for several years togther & works for us...........the TICK RULES ! haha............have a good trading day.........Chris
Start Quote
In Street Smarts Linda R. gives an intraday tick trade. Basically when the tick doesnt confirm a new hi or low at least 90 minutes apart, when the tick retraces 100 pts. you enter. She says you can make a living with this trade. I have not had the patience to test it. For exact details you should consult the book.
End quote
I am assuming the is a fade play.
Michael B
In Street Smarts Linda R. gives an intraday tick trade. Basically when the tick doesnt confirm a new hi or low at least 90 minutes apart, when the tick retraces 100 pts. you enter. She says you can make a living with this trade. I have not had the patience to test it. For exact details you should consult the book.
End quote
I am assuming the is a fade play.
Michael B
The saying I learned is:
VIX is high, time to buy.
VIX is low, time to go.
This is a contrarian method of using it, but has been incredibly accurate.
Compare the VIX and the S&P over the last five years. Almost every time the VIX hit 40+ there was an increase in the S&P of at least 60 points in the next few days. It's amazing.
All this changed since the terrorist attacks. Last year the VIX was 40+ for quite alot of the time from July - October, and in 2001 it was up there for about a week immediately after 9/11. Interestingly in both those periods it went 50+ and that sparked a big rally. So, I would say now that if you see VIX 50+ you can expect to see a 60 pt. rally.
Twice this week VIX went 40+ (Monday and Thursday). Both times it sparked a nice 15-20 pt rally. (I rode the Monday rally, but missed today's). However because of what the VIX has done the last couple years, I wouldn't bet the farm on it giving us 60pts like it used to.
The VIX only reaches these levels when the general consensus is that the apocalyptic "Day of the Lord" has come, the financial markets are crashing, and there there is no tomorrow. It's what Vic Neiderhoffer calls a "hoodoo." It takes courage to go long when the DOW is down 400 pts on the day! But you will only see the extreme levels in the VIX on a day like that.
On the other side, look at the VIX over the last 5 years, and when it gets down below 15, it's time to go short. That only happens when all the dumb money is chasing a rally, and people start printing books that say "Dow 50,000" or whatever. Something tells me we're not going to see that kind of level this year.
Another way to use the VIX I just learned from Price Headly's daily promo-mail is to put a simple Bollinger Band on it. When it hits the upper band, go long. When it hits the lower band, go short. I haven't researched it, but just throw it out there for info.
Hope this helps.
kp
VIX is high, time to buy.
VIX is low, time to go.
This is a contrarian method of using it, but has been incredibly accurate.
Compare the VIX and the S&P over the last five years. Almost every time the VIX hit 40+ there was an increase in the S&P of at least 60 points in the next few days. It's amazing.
All this changed since the terrorist attacks. Last year the VIX was 40+ for quite alot of the time from July - October, and in 2001 it was up there for about a week immediately after 9/11. Interestingly in both those periods it went 50+ and that sparked a big rally. So, I would say now that if you see VIX 50+ you can expect to see a 60 pt. rally.
Twice this week VIX went 40+ (Monday and Thursday). Both times it sparked a nice 15-20 pt rally. (I rode the Monday rally, but missed today's). However because of what the VIX has done the last couple years, I wouldn't bet the farm on it giving us 60pts like it used to.
The VIX only reaches these levels when the general consensus is that the apocalyptic "Day of the Lord" has come, the financial markets are crashing, and there there is no tomorrow. It's what Vic Neiderhoffer calls a "hoodoo." It takes courage to go long when the DOW is down 400 pts on the day! But you will only see the extreme levels in the VIX on a day like that.
On the other side, look at the VIX over the last 5 years, and when it gets down below 15, it's time to go short. That only happens when all the dumb money is chasing a rally, and people start printing books that say "Dow 50,000" or whatever. Something tells me we're not going to see that kind of level this year.
Another way to use the VIX I just learned from Price Headly's daily promo-mail is to put a simple Bollinger Band on it. When it hits the upper band, go long. When it hits the lower band, go short. I haven't researched it, but just throw it out there for info.
Hope this helps.
kp