MACRO & INTERMARKET

VIX (Volatility Index)

SUMMARY DEFINITION

The CBOE Volatility Index measuring the market's 30-day implied volatility expectations derived from S&P 500 index options (the 'fear index').

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What is VIX (Volatility Index)?

VIX (Volatility Index) is a core concept in currency trading.

The CBOE Volatility Index measuring the market's 30-day implied volatility expectations derived from S&P 500 index options (the 'fear index').

Understanding VIX (Volatility Index) helps you manage your risk and spot high-probability trade setups.

Why It Matters for Forex Traders

In forex trading, VIX (Volatility Index) helps you protect your capital. It gives you a clear rule to follow instead of guessing.

How to Identify and Apply VIX (Volatility Index)

  • 1
    Spot and mark VIX (Volatility Index) on your chart during active trading hours.
  • 2
    Check that the overall market trend agrees with your trade idea.
  • 3
    Always place a protective stop loss before entering any position.

Practical Forex Example

For example, on a EUR/USD trade, applying VIX (Volatility Index) allows you to set clear entry and exit points before risking real money.
PRO TRADER TIP

Always test strategies involving VIX (Volatility Index) on a free demo account first before trading with real capital.

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Educational Disclaimer: All definitions and explanations in the MyForexSchool Forex Glossary are for informational and educational purposes only and do not constitute financial advice. Trading foreign exchange involves substantial risk of loss.