Nobody should listen to you. You've already revealed you know bupkis about price chart trading. You're not "teaching me anything", not "making me see the reality of how silly [my] premise is". Please, don't bother "saving me from blowing up my account". "Methinks you doth protest too much."
I came across a blog from a prolific volatility etf tracker. Seems that numerous variants of these timing strategies are breaking down and producing new drawdown lows. Not sure what it means. Perhaps, someone has relevant insight.
There's a few reasons why most of these volatility ETP trading systems are breaking down. I would just link to my website, but I'm not allowed to do that. Hopefully I'm at least allowed a link in my profile 1) Their systems were built using simulated futures data going back to 2004, even though the XIV didn't actually exist until 2010. The values in those simulated backtests would not be what they were if the ETP's existed to be traded. Back then, all the volume in the markets were concentrated in VIX Futures, VIX Options, and S&P 500 options. But now, there is literally trillions of dollars being diverted from those products into the ETP's themselves. Why does this matter? Because things like XIV directly derive their price based on the term structure. Less volume on those products changes the prices of XIV itself. You can view it sort of like the old, the tail is wagging the dog phenomenon. Bottom line, if the ETP's existed, the values of term structure would have been different. That data they are using from 2004 - 2011 to build trading systems is literally worthless. They have built trading systems on meaningless data, which of course is a recipe for disaster. 2) They are focusing in the wrong area. While it's true a simulated backtest (again useless) from 2004 - 2011 did show that VRP strategies and Mean reversion strategies worked pretty well, they are based on useless data that doesn't apply to today's market. Anybody who is trading a VRP strategy (volatility risk premium) or a mean reversion strategy is likely flat in returns since the end of 2012. Those strategies have gone nowhere, and there's many reasons for that. People trading VRP or mean reversion aren't focusing enough on the true drivers of the price of the ETP's. 3) They are binary, buy / sell strategies. Either long XIV, or long VXX. The problem with this is, there is a whole range of middle ground signals that are far too ambiguous to actually be taking live trades off. That middle ground is where people are getting killed. Everybody and their dog knows to go long the XIV when the term structure is strongly contagoed, and likewise it's not rocket science to go long VXX when it's in backwardation. Traders are getting smoked because they are also trying to trade the middle ground, which is essentially guesswork. Markets from 2014 to present are way different than they were from 2010 - 2013, and volatility traders who aren't experienced enough to see why are getting killed. Not everyone's strategy is breaking down though. I'm still as consistent today as I was in 2012 with returns. You just have to know what to look for. 0.02$
It is possible that I may be quoting your website which I can't recall at this moment. Please feel free to send me a PM of your site. Thank You.