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TRADERVISION Trader Talk > The VIX Contrarian Trade Confirmation
The VIX typically trades opposite to the major indexes with VIX breakouts concurring with market breakdowns and VIX breakdowns concurring with market breakouts. Therefore positive VIX price action and patterns can confirm negative SPX price action and patterns and vice versa.
TRADERVISION Trader Talk > The Trendless Gap Trade - The Basics
When price is relatively trendless as indicated by a declining / low ADX price will tend to bounce back and forth between Support and Resistance levels. Since gaps in price typically occur at relatively significant Support / Resistance levels the tops and bottoms of gaps can be traded as S/R levels. As with any S/R trade the basic protocol is to Sell negative price action such as sharp rejections and negative price patterns that occur at levels of potential resistance and to Buy positive price action like strong bounces and positive price patterns at levels of potential support.
TRADERVISION Trader Talk > The Trendless Trade
When the ADX is declining / low price will bounce between Support and Resistance levels. Since gaps in price [ SHD LGHT BLU / PRPL ] often form at relatively significant S / R levels the tops and bottoms of gaps are often pivot points of price and therefore can be good Buy / Sell levels. [ RED / GRN ARWS ] Also note that when the ADX is declining / low basic ocsillator indicators like the Slo Sto can produce reasonlably reliable Buy / Sell signals. [ VRTL DOTD RED / GRN ] Also note that the further the ADX declines the smaller the moves between Support / Resistance become. As well note that since the tops and bottoms of gaps offer a relatively clear S/R levels Stops on positions can usually be placed quite close to the entry level so as to make them relaively quite save trades because the potental for losses is kept at a minimum.
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