Week in Review – Trading with ES, SPY and VXX Divergences
In this video we review the week of August 16-20 which featured some significant volatility, using divergences formed on the SPY and VXX stock charts. This video also features the new ZoneTraderPro VIX BloodHound template which is used to determine the trend direction.
Week in Review 7/16/21
In this video we look at the weeks trades ending on 7/16/21 and make some interesting observations involving the distribution levels and iceberg orders.
New Real Time VIX Template – Week in Review 7/6/21
In this video we look at the new VIX real time template and review 1 week of trades using ZoneTraderPro divergences and the VIX.
The purpose of the ZoneTraderPro VIX BloodHound template is to determine the state of the VIX. It is designed to determine trend and give trade entries using divergences on the SPY. The SPY is used as a proxy for the VIX because more divergences are created on SPY, and it is common to have divergences on both. Read more about that HERE.
There are 2 legacy files and each file has several templates to choose from. There a different file for the VIX and VIX9D. A new template distributed in December 2021 is designed to be more robust and provide real time trading signals. Test each of the templates and see what you like. The December template (ZtpVixLogicRealTimeVvixV3.blk) removed the Nasdaq charts from the V2 template. This speeds up the chart load of the template by removing Nasdaq references from the ES template.
The new real time VIX template is a more complex formula and uses the BloodHound histogram to determine the state of the VIX and the ES.
Click HERE for that strategy page.
The new real time VIX template is looking at 3 price charts and 3 VIX charts to generate a BloodHound signal. In this way, we can easily determine the state of the VIX and if it favors our trading signals on the SPY divergence.
The question that is asked a lot is, are we trading SPY or the ES? We are using the SPY divergence signals as a proxy for trading the ES.
VIX Template Examples
In the charts above and below, there are red and green lines on the bottom indicator panel. I drew these in to denote where the VIX is indicating short and where it went long. There were also real time SPY divergences, both long and short, being indicated on the price charts. An opposing divergence signal can be used as an exit, as they are telling you in real time, you may be subject to a reversal.
As the morning continued on, the system continues to take trades in the direction of the VIX. You see a BloodHound red/green racing stripe on the charts when 5 of the 6 charts are in agreement. This can be used to prevent early entries. These charts are from 1/03/22 and this is a very important point. These charts are ONLY illustrating market direction and why it is a valid trading idea to be trading with the VIX. Not every divergence signal you see on these charts are valid trades. This is only meant to illustrate the power of the ZoneTraderPro VIX templates.
The videos at the top of this page represent the full concept of trading with ES and SPY divergence.
Installation
If you are an existing ZoneTraderPro customer and are upgrading to the BloodHound version, I will send you the files in Skype. This file is a license checker which is installed using the NinjaTrader Control Panel. The second file is a ZIP file containing the BloodHound templates. The link for the BloodHound templates is below.
Download the VIX Files
Right Click and Save As the zip file containing the BloodHound Templates.
These files are unzipped into a folder. Then you have to move them to BhoodHounds’ NinjaTrader folder, and the location is shown below. DO NOT try and import them as a vendor assembly.
NOTE: The file was updated 4/14/2022.
The files are the SharkIndicators BloodHound template files. You need to place these in the BloodHound folder once they are unzipped.
The picture on the right shows that path.
Kinetick
The data we need for this template to work is not provided by NinjaTrader Continuum. You are going to need an additional data feed. I recommend and use Kinetick.
Click the Kinetick image and you will be taken to Kinetick. When you get to the site and sign up, you are going to need to need the following options.
- Basic Service $65
- CBOE Indexes $7.50
- NYSE Non-Pro Exchange Fee $7
- GLOBEX COMBO Level I Non-Pro for $5
- If you plan on trading the NQ, you will need Nasdaq Level 1 – $7
Very Important
You must connect to Kinetick first when you start NinjaTrader. After starting NinjaTrader, you need to make sure you have no preferred connections under TOOLS-OPTIONS-MARKET DATA.
Then you need to tell NinjaTrader to add the symbol ES ##-##. You only do this one time. Start a reguler ES chart and change the symbol from ES 06-22 (or currect) to ES ##-##
Always connect to Kinetick 1st when starting NinjaTrader
Adding The Necessary Symbols - VERY IMPORTANT
Go the TOOLS Menu and choose INSTRUMENTS and click ADD
You are going to add 6 symbols
- VIX9D
- VVIX
- VXX
- VXN
- SVXY (NEW)
- UVXY (NEW)
VIX9D
Name the master instrument VIX9D
The instrument type is INDEX
You need to put the name of the exchange. Put CBOE.
You need to tell Kinetick where to find it. VIX9D.XO
VVIX
Name the master instrument VVIX
The instrument type is INDEX
You need to put the name of the exchange. Put CBOE.
You need to tell Kinetick where to find it. VVIX.XO
VXX
Name the master instrument VXX
The instrument type is STOCK
You need to put the name of the exchange. Put DEFAULT
You need to put the TRADING HOURS. Put US EQUITIES ETH
You need to tell Kinetick where to find it. VXX
VXN
Name the master instrument VXN
The instrument type is INDEX
You need to put the name of the exchange. Put CBOE
You need to tell Kinetick where to find it. VXN.XO
SVXY (NEW)
Name the master instrument SVXY
The instrument type is STOCK
You need to put the name of the exchange. DEFAULT
You need to tell it the trading hours. US EQUITIES ETH
You need to tell Kinetick where to find it. SVXY
UVXY (NEW)
Name the master instrument UVXY
The instrument type is STOCK
You need to put the name of the exchange. DEFAULT
You need to tell it the trading hours. US EQUITIES ETH
You need to tell Kinetick where to find it. UVXY
Add these symbols to the Instrument List
Go to TOOLS and choose INSTRUMENT LISTS
- VIX9D is placed in INDEXES
- VVIX is placed in INDEXES
- VXX is placed in SP500
- VXN is placed in INDEXES
- SVXY is placed in SP500
- UVXY is placed in SP500
Click INDEXES and then ADD. You will receive a popup and then start typing VIX9D. When the symbol comes up, click it and add it to the list. Do the same thing for VVIX and VXN.
Click SP500 and then ADD. You will receive a popup and then start typing VXX. When the symbol comes up, click it and add it to the list. Do the same thing for SVXY AND UVXY.
NinjaTrader Instrument Manager for Vix Setup
In this video we look at adding the VIX9D symbol to NinjaTrader and setup of the BloodHound Charts
Using The Template at the Open
The purpose of this template is to determine trends identified using the VIX. This is not an indicator that calls tops or bottoms. The way it is designed, it WILL NOT call tops or bottoms. Additionally there is no VIX signal from 0915 to 0930 EST because options are not trading then. That is super important to understand.
The templates become more difficult to use on the open. There is not a $VIX trend.
Because options may have expired at the previous close, the VIX9D may open away from the close and have a gap up or gap down.
In this example, we had a bearish gap up, and the 5 minute bar continued to rise. Had it been falling, your decisions are more difficult and likely long trades may have been favored and working.
The VIX option templates seam to preform better at the open than the VIX9D, because it is less susceptible to big movements because of options expiring the day before. There is a significant amount of options that are day traded on expiration day. So this creates a skew at the open.
Monitoring VIX9D
I keep both a 30 second VIX9D and 30 second chart of the VIX on my desktop. It really doesn’t have to be much bigger than the picture on the right.
As VIX falls, as in the example, long trades are favored and short trades are not.
I keep it hovering over the left side of a bigger chart to save space. Toggling the ALWAYS ON TOP property will keep it always visible.
New BloodHound VIX Template
In this video we go over the new template available for Bloodhound user of ZoneTraderPro.
Real Time VIX BloodHound Templates
In this video we look at the Real Time VIX BloodHound templates and a very special offer for new customers of ZoneTraderPro.
This is an older video. The newest video about real time templates is at the top of this page.