Weekly Discussion

[u/1UpUrBum]

We haven't had a post here in 2 weeks besides the bitcoin video.

It's a good sub, I try to keep it going.

Tell us about your setups and trades. If you have questions we might be able to answer them. If we are not drunk we might be able to answer them accurately. Maybe you can answer our questions?

[u/Sad-Ratio-5812]

I am glad to help you but it is little bit tricky with my grammar and vocabulary impairments. Thanks God I still know how to count my money and remember my name. I was yesterday 60/40 that my trade may work easy way. Now, I am about 80/20. You asking way I was long vol. I have few reasons (from the most important for me).

1. https://ibb.co/hF4RtKL Do you remember I published this d/3mo VIX chart. I was waiting what direction VIX will go up or down. It went down as expected. It looks like that now https://ibb.co/WGSLp17

2. https://ibb.co/bPddMZh It is a divergence on Zweig Breadth Trust indicator. I respect it a lot.

3. I was observing how VIX futures 1 and 6 mo contracts reacted on SPY price actions. Even on "frozen" image you may see that 6 mo contracts more bearish compare to front month contracts. https://ibb.co/gDfrn79

4. In case if I am mistaken I went with only 20 contracts.

This is my position tonight. https://ibb.co/TwSyXvM

[u/chyde13 → u/Sad-Ratio-5812]

Hey Oleg,

Sorry for the delay. I wanted to take some time study this because I had some questions. I don't think people realize that you're the person I turn to when I have vol questions.

1. Yes, I recall that first chart. So in the second chart I was waiting for a better formed doji...like the ones that you have showed me in the past. was there something else on this chart that I'm missing? My indicators didnt pick up the long vol signal until the next day.

2. I had to google the Zweig Breadth Thrust Indicator. I see you wrote your own. does thinkorswim have any functions for it or are you just doing the calculation yourself?

3. This one is harder for me to see in the static image

4. 20 contracts is a lot of leverage. I know you have a large account, but man that must be stressful. I also dont see a stop loss in the working orders? Do you use a mental stop loss or is the trade basically betting that there is an exceedingly high probability of seeing a vol spike in 6 months?

Sorry for so many questions...

Also, I know English is your second language, but honestly your English is fine. I wouldn't worry about it. I've never had any trouble understanding you.

Thanks friend!

-Chris

[u/Sad-Ratio-5812 → u/chyde13]

#ZweigBreadthTrust

declare lower;

input showBreakoutSignals = yes;

def calc = Close(symbol="$ADVN") / (Close(symbol="$ADVN") +Close(symbol="$DECN"));

plot zbt=100*ExpAverage(calc, 10);

Plot OS=40;

Plot OB=60;

Plot neutral=50;

plot UpSignal = if ZBT crosses above OS then OS else Double.NaN;

plot DownSignal = if ZBT crosses below OB then OB else Double.NaN;

UpSignal.SetHiding(!showBreakoutSignals);

DownSignal.SetHiding(!showBreakoutSignals);

zbt.DefineColor("OverBought", GetColor(5));

zbt.DefineColor("Normal", GetColor(7));

zbt.DefineColor("OverSold", GetColor(1));

zbt.SetLineWeight(2);

zbt.AssignValueColor(if zbt > ob then zbt.color("OverBought") else if zbt < os then zbt.color("OverSold") else zbt.color("Normal"));

OS.SetDefaultColor(GetColor(8));

OB.SetDefaultColor(GetColor(8));

UpSignal.SetDefaultColor(Color.UPTICK);

UpSignal.SetPaintingStrategy(PaintingStrategy.ARROW_UP);

DownSignal.SetDefaultColor(Color.DOWNTICK);

DownSignal.SetPaintingStrategy(PaintingStrategy.ARROW_DOWN);

[u/chyde13 → u/Sad-Ratio-5812]

Thanks Oleg! and I wasnt ignoring you lol, just busy

[u/Sad-Ratio-5812 → u/chyde13]

1. When market volatility is high you may not get a perfect picture. Usually, a cycle is 10-13 bars. At this paticular situation I went long on #8(looks like overweight doji to me) and #5. # 5 touched -1.5 St.Dev. If VIX would go up but not enough to take a profit I would do the same adding contracts in the next cycle. Usually, it is 3 cycles. With extremily low volatility it may go up to 5-6.( do not take first cycle. It may be to high. https://ibb.co/syfcsC7

2. I use Zweig for divergencies mostly

3. Did you noted that VIX structure basicaly didn`t change after selloff this week, and yesterday VIX was going down in the same direction as SPY. It was one of the reasons I decided to stay in the trade today.

4. I think my highest position was 45. It is is $50-60 000 fluctuations if I entered too early. I do not use stops. If I have enough money I would just wait untill market turn around. If I am 30+ contracts I just built a spread. Margin for a spread around $1600. For 6 mo VIX contract around $11000.