Before you are going to trade in the real account at least practice one moth as a demo in the demo account for trading this will make healthy points for you to healthy trade. The Volatility Index (VIX) Indicator mt4 is a custom indicator for Meta trader 5 platforms. It is not a directional indicator. The main work of this indicator is to identify the increase and decrease in the volatility of the market trend. It is the most popular indicator. This indicator reflects investors/traders sentiment. Higher VIX indicates a lot of fear in the market trend and lower VIX indicates lack of fear in the market trend.
I said that Volatility Index (VIX) Indicator is used to indicate an increase or decrease in the volatility of market trend. The volatility in the market has different types. There are four different types of volatility in market trend.
- Historical volatility: it measures how much securities price is deviating from its average.
- Future volatility: it is the measure of the volatility which could be in the future.
- Forecast volatility: it is a primary usage is to estimate the value of the market risk.
- Implied volatility: it is a measure of the movement of security prices in themarket trend.
Volatility Index (VIX) Indicator is a volatility index which is derived from sells and the price rate of each option representing the market trend. The formula used for the calculation can measure the maximum market volatility. It can measure volatility for Forex trading and further market exchange.
Volatility Index (VIX) Indicator cannot buy or sell things directly. It can exchange via derivative contracts. High readings in the VIX mirrors traders are linked with high volatility conditions while low readings are linked with low volatility conditions. It is a single input parameter. It defines the period for calculating the VIX. Formula for this indicator is WVF = (Higher high value (Close, 22) – Low)/ (Higher high value (Close, 22))*100. The value 22 is used in 22 trading sessions in the month. This indicator is used for observing whether the market is reversing or not. Finding the strength of a trend. It also identifies possible breakouts in the market trend.
Volatility Index (VIX) Indicator also uses specific pip in its graph to show whether the volatility is rising or whether the volatility is decreasing. This indicator also has specific colour schemes for candlesticks and signals. Colours used in this indicator are Green, Red, Blue and Cyan.
USES Of Volatility Index (VIX) Indicator:
VIX indicator has many uses. This indicator is used for the volatility index. This indicator is used to identify an increase or decrease in the volatility in the market trend. This indicator can identify four different types to measure the volatility in the trade.
Volatility Index (VIX) Indicator also uses a formula for clearance of volatility range in the indicator. It is the most popular indicator. It is very easy to use this indicator in our daily trade. Many traders used this indicator to find volatility in their market trade. This indicator is also used for breakouts in the market trend. This indicator also uses different colours for the understanding of the volatility in the trade. It is very easy to use Volatility Index (VIX) Indicator.