Aardvark Adventures Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Aardvark Adventures

DAVE 243.68

+3.9%

Nov 5 3:59 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: ~digs who wrote (33)	2/22/2004 8:55:39 PM
From: ~digs	Read Replies (1) of 7944

unedited chat log re Trader Vic's 123 reversal method [19:35] <Invest> oh btw, dave [19:35] > yeah? [19:36] <Invest> your earlier post regarding ^vix, what do you think [19:36] <Invest> market ripe for temporary downturn? [19:36] > when you opened it up .. did it have the trendline? [19:36] > conditions are ripe for major swing [19:36] <Invest> I saw a blue line down [19:36] > rare levels of complacency [19:36] > yeah okay [19:37] > but so far no signal has been generated [19:37] > (re downswing) [19:37] <Invest> could you explain what you saw in that chart, if you have a few minutes? [19:37] > basic downtrend [19:37] > here [19:37] <Invest> the red line at 20 was peculiar to me [19:37] > i'll explain a somewhat complex trading pattern [19:37] <Invest> ok [19:37] > that i rely on bigtime [19:38] > it's called a 123 reversal [19:38] > we've talked about it b4 [19:38] <Invest> yes [19:38] > you have elder? [19:38] <Invest> not the book nope [19:38] <Invest> but I know 123 I think [19:38] > shit okay [19:38] > pretty simple once you get the visualization of it [19:38] > lets use the Vix for illustration [19:38] <Invest> alright [19:38] > so you've got your obvious downtrend [19:39] <Invest> yep [19:39] > when the vix prices crosses that downtrend to the upside we have a preliminary breakout [19:39] > it can go far at first w/out pulling back [19:39] <Invest> right [19:39] > or it can go just a lil and then comes back to RETEST the line from the OPPOSING side [19:39] > sometimes it doesn't even get back to the line [19:40] <Invest> correct [19:40] > (that would mean new lows for the vix prolly) [19:40] > sometimes it'll just double bottom [19:40] > or maybe even not even get that far before reversing back up [19:40] > so you have the prelim break.. that's step one.. = caution [19:40] > then you have that retest which is step 2 [19:41] > the further from the line that it gets ... the more strong the signal [19:41] <Invest> ahh ok good to know [19:41] > if it crosses back below the downtrend line again then the breakout is negated [19:41] <Invest> correct a strong drop signal [19:41] > step 3 is pretty simple [19:41] > step 3 would be a higher high after the retest in the case of VIX [19:41] > what you then have is confirmation [19:42] > and the makings of a new uptrend [19:42] > so its all conditional and there's no emotion to it [19:42] > should leave little room for interpretation.. which is good [19:42] > basically idea is to position after step two [19:42] > when it reverses back up [19:42] > want to watch volume as an indication also [19:43] > rising volume on the uptick gives legitmacy [19:43] <Invest> yeah [19:43] <Invest> I see a downward wedge and depending on the direction [19:43] > allong w/ falling volume on the downward part of the retest [19:43] <Invest> and I see a lot of consolidation at the bottom [19:43] > yteah [19:43] <Invest> I see at least a 15pt move in either direction [19:43] > and that consolidation gives rise to magnitude of impromptu move [19:44] <Invest> exactly [19:44] <Invest> I know ^vix is at an all time low but [19:44] <Invest> it could still go lower [19:44] > so then basically you take starter positions after completion of step two [19:44] > and that might mean selling vuneralbe longs in the case of 123 vix reversal [19:44] > aka tech [19:45] <Invest> yeah [19:45] <Invest> dow [19:45] > and then once you get confirmation [19:45] > the higher high [19:45] > then you take your larger positions/sell remaining longs [19:45] > and do not flip flop again until the same process has worked itself out in an inverse fashion [19:46] > (same 123 ordeal applies to broken uptrends) [19:46] > anyway this process is integral to my trading [19:46] > and it works in all time frames [19:46] <Invest> hmm I think you maybe right [19:46] > all the way down to daytrading w/ 1 or 5 min charts

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next