Balls of Steel Trading System v3.0
Your phone beeps. VXX/VIX ratio 1.62. Volume 340%. 3:47 PM. You make the trade.
Professional VXX trading system built on one principle: the VXX/VIX ratio is everything.
The One Number That Matters
VXX/VIX Ratio.
That's the edge. Not volume. Not patterns. Not time windows.
The ratio tells you if VXX is overpriced and worth fading.
How It Works
VXX tracks short-term VIX futures. During fear spikes, VXX rises faster than VIX (panic premium). That's when VXX becomes overpriced. That's when you fade it.
The ratio captures this:
VXX/VIX Ratio = VXX price ÷ VIX level
Example:
VXX = $42.15
VIX = 26.50
Ratio = 42.15 ÷ 26.50 = 1.59
Translation: VXX is 59% more expensive than VIX level
The Tiers (Memorize These)
- Ratio >1.60 = PREMIUM FADE ⭐⭐⭐ (Max position $500)
- Ratio 1.55-1.60 = STRONG FADE ⭐⭐ (Full position $400-500)
- Ratio 1.45-1.55 = NORMAL FADE ⭐ (Standard $300-400)
- Ratio 1.35-1.45 = WEAK FADE (Half size $150-250 or skip)
- Ratio <1.35 = NO FADE ❌ (VXX too cheap, skip puts entirely)
Why The Ratio Works
Normal range: VXX/VIX typically runs 1.40-1.55
During panic: Fear spikes drive VXX faster than VIX (panic premium)
The math:
Normal: VIX 20, VXX $29 = Ratio 1.45
Spike: VIX 30, VXX $51 = Ratio 1.70
VXX gained 76% while VIX gained 50%
That 26% gap = panic premium = your edge
Mean reversion: VXX reverts to normal ratio range (1.40-1.55). That's the fade.
Why ratio <1.35 fails: VXX already cheap vs. VIX. Limited downside = no edge.
Why ratio >1.60 succeeds: VXX extremely overpriced. Maximum reversion edge.
The ratio quantifies the edge. Everything else confirms execution timing.
What This System Does
You're walking into a meeting. Your phone vibrates:
⭐ INSTITUTIONAL FLOW ⭐
VXX/VIX Ratio: 1.62 (PREMIUM FADE)
Volume: 340% (INSTITUTIONAL)
Time: 3:47 PM (90% WINDOW)
Signal: CONFIRMED
Entry: $41 puts, $500 position
30 seconds. You execute. Back to your meeting. That's it.
This system tells you:
- VXX/VIX RATIO - Is the fade worth taking? (Your edge)
- VOLUME - Are institutions trading? (Confirmation)
- TIME WINDOW - Is probability highest? (Execution timing)
- TECHNICAL SETUP - Where's the entry? (Precision)
- ALL 5 REQUIRED - Miss one = skip trade
You decide. You execute. You profit.
The 5 Criteria (ALL Required)
Like a pilot checklist. One red light = abort.
1. VXX/VIX Ratio >1.45 (25% weight - YOUR EDGE)
Purpose: Value filter. Prevents fading cheap VXX.
Without it: You fade VXX at $28 when VIX is 22 (ratio 1.27). VXX has limited downside. You lose money.
With it: Only fade when ratio >1.45. VXX is overpriced vs. VIX. Fade has edge.
This is the foundation. Everything else confirms it.
2. Volume >200% Average (30% weight - MOST PREDICTIVE)
Purpose: Confirms institutional participation.
Standard threshold: >200% average (>533,000 volume for VXX)
Institutional threshold: >300% average (>800,000 volume)
Major institution: >400% average (>1,000,000+ volume)
Without volume: Retail noise. Gets stopped out.
With volume: Real money moving. Follow the flow.
3. Time Window (25% weight - PROBABILITY MAXIMIZER)
Morning Fade: 9:50-10:15 AM (85% reliability)
Power Hour: 3:10-3:25 PM (80% reliability)
Institutional Flow: 3:45-4:10 PM (90% reliability) ⭐ SUPREME WINDOW
Why windows matter: Outside these times = 50% coin flip. Inside windows = 70-90% edge.
4. Technical Setup (15% weight - ENTRY PRECISION)
Pattern + Level:
- VXX at resistance OR breaking support
- Shooting star, doji, hammer candlestick
- Moving average rejection (20/50 SMA)
- VWAP break
Purpose: Identifies turning point. Prevents fading mid-trend.
5. No Contradicting News (5% weight - RISK FILTER)
Check last 30 minutes: Fed announcement? Earnings surprise? Geopolitical escalation?
Purpose: Avoid fading into continued momentum.
If news = skip. If clear = execute.
Real Trade Example (Step by Step)
Date: January 20, 2026
3:46 PM - Notification arrives:
VXX: $42.15
VIX: 26.50
Ratio: 1.59 (STRONG FADE)
Volume: 340% average (INSTITUTIONAL)
Window: Institutional Flow (90% reliability)
Setup: VXX rejected 50 SMA, shooting star forming
News: Clear (no Fed, no major events)
Checklist:
- Ratio 1.59 (>1.45, strong fade tier)
- Volume 340% (>300%, institutional threshold)
- Time 3:46 PM (institutional window active)
- Technical setup (50 SMA rejection + pattern)
- No news (clear)
ALL 5 CONFIRMED = GO
Position sizing:
- Ratio 1.55-1.60 tier = $400-500 position
- Choose $500 (high confidence)
- Strike: $41 puts (1 strike OTM)
- Premium: $0.75 per contract
- Contracts: 6 ($450 total, within $500 limit)
Entry: 3:47 PM at $0.75
Management:
- Target: 30-50% gain ($0.38-$0.50 profit per contract)
- Stop: 50% loss ($1.13 per contract)
- Time limit: 4:05 PM absolute deadline
Result: 3:58 PM - VXX drops to $40.50
- Puts now worth $1.15 per contract
- Gain: $0.40 per contract = 53% gain
- Total: 6 contracts × $0.40 × 100 = $240 profit
- Hold time: 11 minutes
Exit: 3:58 PM - Target hit, close position
Post-trade analysis:
- Ratio >1.55 = strong fade worked
- Volume >300% = institutional flow confirmed direction
- Window 3:45-4:10 = 90% reliability held
- Pattern + level = precise entry
- Result: 53% gain in 11 minutes
That's the system working exactly as designed.
Institutional Flow Window (3:45-4:10 PM)
90% Reliability - The Supreme Window
Why this window is different:
3:45-4:10 PM = real money positioning before close.
- Portfolio rebalancing (hedge funds)
- Mutual fund flows (NAV calculation)
- Index fund rebalancing (tracking error)
- Institutional desks closing positions
This isn't retail. This is institutions with billions.
The Perfect Storm
When you see ALL of these:
- Ratio >1.55 (VXX expensive)
- Volume >300% (institutional threshold)
- Time: 3:45-4:10 PM (supreme window)
- Clean direction (conviction move)
- Pattern confirmed
= 90% win rate setup
Example:
3:47 PM
VXX: $42.15
VIX: 26.50
Ratio: 1.59 (STRONG FADE)
Volume: 340% (INSTITUTIONAL)
Window: ACTIVE (90% reliability)
Decision: Buy $41 puts, $500 position
Target: 30-50% gain by 4:05 PM
Stop: 50% loss
Exit: 4:05 PM absolute deadline
Join the institutional flow. Don't fight it.
Prompt Coach
Your personal AI analyst. No subscriptions. No APIs. Just smart.
How it works:
- App monitors time and market conditions
- Delivers the right prompt at the right time
- Pre-fills live data (VXX price, VIX level, volume, indicators)
- You tap "Copy"
- Paste into ChatGPT or Claude
- Get systematic analysis in 30 seconds
Daily schedule:
