Qqq trading signals
Have u tested the strategy with real live results? The year without volatility.
Recent Charts of Our MRM methodology
Our final two graphs this week showcase two popular volatility indicators that can be extremely useful for short-term QQQ speculators. While the VXN has great potential in the future, its limited history at this point in the game mean it must be interpreted cautiously.
With less than two years of data, how can cubes speculators know what a true VXN extreme is? As is apparent above, there have been three major tops and two major bottoms in the VXN already, but they all turned at very different levels. With this key caveat in mind, the VXN can still provide some fascinating short-term speculation insights. Extreme volatility always coincides with rampant general fear. With limited historical data, VXN 75 seems to be a reasonable short-term buy signal. Low volatility usually coincides with widespread greed and complacency.
The VXN has carved out two major interim bottoms thus far in its existence, marked with the white arrows above. Both points have been profitable, but not optimal, moments in time to go short the cubes, or sell QQQ calls and buy QQQ puts.
So far, a reasonable general short-term sell signal seems to be around VXN Interestingly, a superior sell signal can be mined from the VXN data. Note that after each major VXN top that volatility rapidly bleeds off and collapses in subsequent months.
Following each spike up, there was a sharp plunge below 60 that is readily apparent in the chart above. Somewhere below 60, each VXN deflation following a QQQ bounce fell to a level where it hit serious technical congestion. The yellow circles above mark this congestion. Rather than continuing plunging sharply, the VXN abruptly halted and suddenly started traded sideways for weeks at a time.
Extremely provocatively, this short-term congestion marked the actual tops of each bear market rally incredibly well, as the yellow arrows indicate. It would be much more challenging to spot this congestion in real-time than in a historical chart of course, but it occurred near the VXN level in the last two bear rally tops. While we are constantly continuing to refine our internal Zeal trading models for our own QQQ speculations, a strategic VXN trading methodology based on recent history would be as follows….
Then, with shorts closed and longs intact, patiently wait for the VXN to plunge below 60 relatively rapidly. After the VXN bounces under 60, near the low 50s range, wait a week or two to watch for the telltale sideways congestion witnessed above. When the congestion in the low 50s actually occurs, the time to go short has arrived. While just using a NASDAQ or cube chart alone makes it difficult to discern future trends, adding in some implied volatility data as an indicator drastically improves the probability of making a successful trade.
If you remember that high short-term fear, the perfect time to buy, manifests itself in extreme volatility, you are already way ahead in the game. Our final graph is built on the same methodology, but with the VIX superimposed over the cubes this time. The VXN above had at least three major limitations. Finally, the VXN congestion marking cube bear rally tops occurred at significantly different levels, frustrating efforts to discern it developing in real-time.
The venerable VIX, the ultimate implied volatility indicator for the US equity markets, suffers none of these limitations. Note in the graph above how VIX spikes are generally sharp and of short duration.
If the VIX plunges to 20, extreme complacency and greed abound and it is the time to sell the cubes. The yellow circles above mark VIX congestion levels.
On the VIX, after a steep fall from an interim top, congestion developing around 25 has coincided virtually perfectly with short-term QQQ tops. Unlike the VXN, in the two recent bear rallies the VIX congestion occurred really close to the same 25 level, a big added bonus for real-time analysis.
Then, with shorts closed and longs intact, patiently wait for the VIX to decay below 30 relatively rapidly. After the VIX bounces under 30, near the 25 range, wait a week or two to watch for the telltale sideways congestion seen above. When this technical congestion in the mid 20s occurs, the time to go short has arrived.
Sell your QQQ longs and short the cubes. These basic volatility rules for trading the QQQs are definitely strategic in nature. Naked options trading is very risky - many people lose money trading them. It is recommended contacting your broker or investment professional to find out about trading risk and margin requirements before getting involved into trading uncovered options. Uncovered Options Trading System. What you can expect: One single winning trade could pay for the membership for years to come.
Uncovered options trading involves greater risk than stock trading. You absolutely must make your own decisions before acting on any information obtained from this Website. The return results represented on the web site are based on the premium received for the selling options short and do not reflect margin. It is recommended to contact your broker about margin requirements on uncovered options trading before using any information on this web site. Use our " Trade Calculator " to recalculate our past performance in relation to the margin requirements, brokerage commissions and other trading related expenses.
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