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Allan Harris
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After practicing law for way too long, I moved my family to the beach (Kiawah Island, South Carolina) to trade stocks for a living. After making and blowing a fortune in the technology bubble of the 1990's (and then again in 2006-08), I discovered the art and science of trend following. In... More
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  • Trading VXX  1 comment
    Jul 2, 2012 7:54 PM | about stocks: VXX

    A lot has been written about how VXX and UVXY aren't efficient ways to play volatility. I am at the opposite end of the spectrum as I find them to be great trading vehlcles for volatility or even directional signals for equity indexes. Between VXX, UVXY and XIV, there is enough liquidity and/or options to swing trade any of these very robust market measurements, whatever they may be tracking.

    There are a myriad of technical indicators that can be used to trade VXX. Moving averages, stochastic, Bollinger Bands, etc. Find the settings that suits your style of trading. I use an algorithm that is something of a cross between a Parabolic Stop & Reverse and an Average True Range trend line indicator using a trailing stop.

    Below are two examples of how VXX lends itself to trend following or swing trading in daily and then hourly price bars.

    (click to enlarge)

    (click to enlarge)

    Disclosure: I am short VXX.

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  • Author’s reply » VXX ready to turn up: http://bit.ly/M05qXL
    4 Jul 2012, 09:09 PM Reply Like
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