Getting started with VIX indicators

Hello I am new to this forum and very new to trading stocks in general, and I want to get started using VIX.

I brought up the Volatility S&P 500 Index chart at TradingView. Now I am wondering what else there is to it.

When Volatility S&P 500 Index price spikes high does that mean all stocks in the S&P will fall in prices?

What stocks are best for using the VIX indicator?

I think (but don’t know for sure) that if the VIX has already spiked the move has already happened.

I would imagine it’s better to enter a short when volatility is low provided there is a short signal from a trading method you use.

Conversely when readings are high, its better to look to buy. Of course there are so many permutations to what I just said, it’s not nearly so simple.

This has always confused me with the VIX by the time you get in from it’s signals it’s too late - I could be wrong.

I would imagine that trading the index itself is a better option than individual stocks, unless you find stocks highly correlated with it.

I think market internals (breadth indicators) could be used in conjunction with the VIX.

On the most recent sell off market internals had been deteriorating for a while, all with high levels of complacency in the VIX.

This is a classic sign that a crash maybe be coming, coupled with an inverted yield made it all but certain.

It only needed a catalyst which was the coronavirus.

If you do want a purely VIX system for trading, I do recall in Practical Speculations by Victor Niedhoffer there was a whole chapter devoted to the VIX.

Trading View has dozens of different VIX indicators to chose from and they all look vastly different. Which one is the standard VIX indicator to select?


I have no idea lol

Does VIX not work well for FOREX? It only works with stocks in the SPX?

This is not getting many responses. What trading forums are busiest?

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this forum is the most responsive lol people probably just dont know what youre talking about to be honest


VIX measures the implied volatility on the S&P. So generally speaking the stock indexes will work best with it.

But even with FX traders it is considered a risk on risk of barometer.

I wouldn’t use it solely to trade Forex though.

VIX reflects the general level of market anxiety regarding risks - which is expressed in implied volatility of stock options (derived from current option prices). The underlying asset of those options is S&P 500 index, i.e. all stocks included in S&P 500 make contribution to VIX changes.

VIX is an index which means that the real one can be seen with adding a symbol, not an indicator. Also, there is VIX on other instruments besides S&P500.

All indicators in Trading View provide different interpretations of this index.

It has a lot of useful applications. You can trade it, trade other instruments based on it, hedge positions, etc.

If you want to find the Forex connection here, I suggest you check what happens with the VIX after a “disturbance” in the emerging market currencies :slight_smile: