VIX REVERSAL SCALPER BY TREND FRIEND - STOCKS ONLY
This indicator is built for scalping, but can be used for swing trades by adjusting the signal settings to a higher number.
This indicator is meant for stocks with a lot of price action and volatility, so for best results, use it on charts that move similar to the S&P 500 or other similar charts.
This indicator uses real time data from the stock market overall, so it should only be used on stocks and will only give a few signals during after hours. It does work ok for crypto, but will not give signals when the US stock market is closed.
**HOW TO USE** When the VIX Volatility Index trend changes direction, it will give a bull or bear signal on the chart depending on which way the VIX is now trending. Follow these when price is near support/resistance or fibonacci levels.
For more signals with earlier entries, go into settings and reduce the number. 10-100 is best for scalping. For less signals with later entries, change the number to a higher value. Use 100-500 for swing trades. Can go higher for long swing trades.
***MARKETS*** This indicator should only be used on the US stock markets as signals are given based on the VIX volatility index which measures volatility of the US Stock Markets.
***TIMEFRAMES*** This indicator works on all time frames.
**NOTE** Repainting does happen but it is seldom. If I get enough requests to remove repainting I will, but since it is built for early entries, preventing it from repainting will make the signals show up later than normal.
Due to various factors, this indicator might not give exit signals every time it should, so be sure to watch the price action for entries/exits and don't rely solely on this indicator.
**INVERSE CHARTS** If you are using this on an inverse ETF and the signals are showing backwards, please comment with what chart it is and I will configure the indicator to give the correct signals. I have included over 50 inverse ETFs into the code to show the correct signals on inverse charts, but I'm sure there are some that I have missed so feel free to let me know and I will update the script with the requested tickers.
***TIPS*** Try using numerous indicators of ours on your chart so you can instantly see the bullish or bearish trend of multiple indicators in real time without having to analyze the data. Some of our favorites are our Auto Fibonacci, Directional Movement Index, Volume Profile, Auto Support And Resistance and Money Flow Index in combination with this Vix Reversal Scalper. They all have real time Bullish and Bearish labels as well so you can immediately understand each indicator's trend.
Release Notes
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Added ability to change symbol used for signals which allows you to use this with another stock that leads ahead of the stock you are trading or use the VIX from a different exchange or use a different country's VIX as requested by a user.
Changed the default setting to use the RMA 10 for signals instead of the HMA 20. Seems to give better, more reliable signals with this setting.
Added ability to change the type of moving average being used and updated the title for signal length.
@tradeleblebi, Haha, thanks for the kind words. Did you read the directions on how to use it? It has a very specific purpose and should not be used on most markets.
iknowknowthing
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I have one request. Could you make the similiar indicator for INDIAVIX, would be really helpful for all indians around. Thanks.
FriendOfTheTrend
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@iknowknowthing, Thanks for letting me know, I hadn't thought of that. I just upgraded it so you can choose whatever symbol you want for the source(such as INDIAVIX) and updated the default settings to be more reliable.
OlegDaze
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That's an interesting concept to try out, thank you!
CoffeeshopCrypto
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im going to test this against info derived from the MACD and RSI. Lets see what i get.
FriendOfTheTrend
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@antifmradio, Let me know how it turns out!
CoffeeshopCrypto
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@FriendOfTheTrend, ok so ive tested this out a number of times against crypto markets since that seems to be the going trend of popular people using it. WHile it works well on its own obviously you NEVER want to use this alone. It gives a HUGE amount of false signals with very little percentage return. my best setup that i cound find in using it is like this.
Use 3 indicators: 1. THis one (VIX-Reversal-Scalper-by-Trend-Friend) 2. An RSI Indicator (with the upper and lower lines set to 50) 3. A Stocastic RSI with both the K and D bands showing, as well as an area market for over bought and over sold)
Set the VIX more or less signals to = 100 wait for a BUY (BULL entry signal) Do not enter the trade you have TWO confluences showing: A. RSI is +50 B. Stocastic % is NOT in the Overbought area.
Also You can enter a BUY position if the stocastic is NEAR the overbought area but it HAS to be in an uptrend and the %D line has to be BELOW the K% line. THe close it is to the overbought area, the lesser your return will be. ***BEST SETUP*** Its best to have the Stocastic bands Just above the oversold area and moving upwards. The RSI would have just broken over 50 You already recieved a BULL Signal
FriendOfTheTrend
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@antifmradio, So, I wouldn't really recommend using it on crypto. It works ok on Bitcoin, but it is based off stock market data, so it will work much better on US stocks and etfs than it will on crypto. It should never be used without confirmation from other indicators/patterns.
I would recommend pairing it with some of my other indicators such as MOM + MFI + RSI and DMI + Fisher indicators. Wait for all labels to go green/red and line up with a signal from the VIX scalper. I also just published another VIX trend analysis tool that is very similar, but shows a moving average cloud of the VIX and gives green/red bars when they cross for signals. That one is nice because then you can actually see how strong the vix trend is. Check those out and see if it helps. Appreciate the feedback on your tests!
CoffeeshopCrypto
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@FriendOfTheTrend, glad you published the new one. Ill check it out via your profile.
As an additional note, i would suggest adding a 200 EMA / SMA to this VIX indicator? THis way when using it, we can see if our price action is above or below the trend. This would help us to enter a position with the rice TP level. If we were WITH the trend and above the 200, we would go 1:2 or 1:3 dependong on RSI
If we were with the trend but BEWOW the 200 (for a short period) and RSI was again reading +50, we would know to go 1:1.5 as a maximum.