Profiting From trading 2 Markets that Move the INVERSE from one another .........
I need some help in understanding a concept .......... My thought is that , if 90% - 100% of the time ,that the VIX moves in the Opposite direction of the ES and YM ( this is theoretical of course ) , but these Markets do seem to Move Inversley from one another , almost Everyday I look over the Indexes
If this is the case, and a great setup ( Based on my trading Method ) occurs via analysis of the Chart(s) , then would it ever make since to trade either the ES or the YM in the Opposite direction that I am expecting the VIX to move ?
So if I am assuming the VIX to move to the upside, then I'd short the Ym and or the ES ( No matter if I get a great setup on the ES or YM )
This all might not be a smart way to trade , since I'm sort of going on Blind faith in trading 2 Markets Inversley of one another , when only ONE of the Charts on any given day, is likely to give me the setup I look for on any Market to place a trade
I don't trade or know much about the VIX, but I do know about correlations, all of my trades are based on them: ES with YM, ZB with ZN, and the inverse correlation of 6E and DX. While these correlations work most of the time, a part of my trading methodology does require independent evaluation of each instrument. What i mean is, the correlation itself is only a part of my evaluation to put on the trade.
If you have interest in correlations in general I would highly suggest MRCI Online. I check it daily.
Vive memor leti fugit hora - Live mindful of death, the hour flies
The following 2 users say Thank You to happyrenko for this post: