Monday, April 11, 2016

Best Odds Parts 2.....Do the Opposite....04.11.16

A tip of the hat to long time Mosaic user Robert who emailed me after Friday's post to advise me that the way he trades the long term stops volatility chart is to short the peaks...a strategy he notes has limited the time he's in the market and has been successful 6 out of the last 6 times he's done it..
He uses his own signal to determine when the peaks are about to exhaust but basically waits for a 3 bar reversal signal on the 130 minute chart using a PSAR (parabolics).
Good job Robert!   Just goes to show that 2 heads are better than one and that there's more than one way to use this volatility data..
Keep in mind these are directional this case no delta neutral protection but the
win/loss ratio does argue for some risk off exposure.
Top chart with arrows is the SPY , as is the bottom chart with SPY price action.
Middle chart is the VIX for comparison and confirmation purposes.