My New Volatility Strategy

So for the next few months I am going to focus on a volatility index, specifically VIXY which is an ETF that is supposed to follow the VIX.  If you look at the yearly chart it is moving like the VIX but it is also going down.  

Since its creation several years ago, VIXY has plummeted to around 27 points when it originally opened around 400 points.  There is definitely upside potential to this ETF and since I bought it in the middle of the day I am already up a few 10ths of a point.  

My observation is most every time the market goes up the VIX goes down and most every time the market goes down the VIX is up.  I am buying at a very low point now so as the market goes down I will wait till I make my profit target then sell.

This is a contrarian play and is basically a hedge against the market.  I am strictly playing the stock this way to make short term money.  I want to see how well I can time my entries and exits for the most profit.  Wish me luck and join me if you would like.  Let me know your results in the comment section below.

How Do I Start Trading?

By Photokanok, published on 26 July 2013
Stock Photo - image ID: 100186685

The first thing to do to start trading is to set up an account with one of the online brokerage companies.  The most well-known are TD Ameritrade, E-Trade, Scott Trade and Charles Schwab.  I use Trade King because the commissions are low ($4.95) and you can call a broker to place a trade for you. The on-call brokers work magic, they can get your trade in better than your price sometimes. If you choose them let me know there's a referral program where we both can get $50.

For charts and analysis nothing beats Think or Swim. I have a TD Ameritrade account just for the Think or Swim paper money and for their Investools free classes. I don't trade on them however because their commission is $10, just for practice and info.

This will get you up and running.  The key however, is to practice before you trade.  Be sure to make use of the paper money trading tools.  This helps you to practice strategies and get used to the stress of pulling the trigger.  Your emotions will get the better of you if you let them so it's good to plan your entrance and exit strategies and to be disciplined.