To gain a full picture of TLT momentum we simultaneously monitor 2 charts on 2 minute bars…one of TLT with a VIX overlay and one of TBT with a NYAD overlay. We also use a 8/8 hi/lo channel and an SAR on each price chart. The trading triggers are the convergence and confirmation signals of the 2 charts. This is a ” Two heads are better than one” tactical approach. A casual glance at this setup might lead a trader to conclude that the crosses(signals) are always in sync…this is not the case.
Over the past 14 days in-sync setup has produced an average of 2.7 trades per day with an excursion time of 22 minutes and a gain of $ .21/trade. The in-sync SAR provides our exit signal….Long or Short. During the 14 day backtest period there were 3 losing trades averaging 7 minute excursions and $.09 losses. The setup needs to be monitored closely as the VIX and NYAD cross signals “float”, but watching the 2 charts together provides a distinct advantage over monitoring only one or the other.
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