Trading Journal (Excel) for detailed recording of all trades in different time units
We originally traded the VXX in this strategy. However, in light of the announcement by the issuer of the VXX on March 14, 2022 that it would not issue any new shares for the time being , we are continuing to trade the VIXY.
The strategy is based on the natural downward drift that was virtually "instilled" in the VIXY by its creators.
Options trading and volatility are two things that are inextricably linked. For option writers, increased volatility means that attractive premiums can be collected. However, a strong and rapid increase in volatility, such as in February 2020, makes us option writers break out in a sweat.
But we know that volatility will fall back towards its mean and thus return to a calm level. We take advantage of this " mean reversion effect " and another special feature in the composition of the VIXY with this strategy.
That sounds simple at first. And it is, if you use a functioning set of rules. Trading volatility has its pitfalls, which can have a serious impact on your portfolio if you ignore key factors and don't limit the risk.
Trading in five time frames
daily chart
4-hour chart (H4)
hourly chart (H1)
15-Minutenchart (M15)
5-Minutenchart (M5)
The rules are very simple to implement and, depending on the time unit traded, require more or hardly any time in front of the screen.
The time spent in front of the screen can be significantly reduced through alarm functions and automatic notifications. We will show you how this works in the training.
