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Vix or VolQ as momentum or direction indicator?


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Vix or VolQ as momentum or direction indicator?

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 aotc 
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Does anyone use the intraday Vix or VolQ (1 min chart for example) as a momentum or direction indicator? What do you think?

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 n7ekg 
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VIX is for momentum ONLY. It's not for trying to determine direction, sorry. I use VWAP and VWAP extensions for that.

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 EgoRisk 
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aotc View Post
Does anyone use the intraday Vix or VolQ (1 min chart for example) as a momentum or direction indicator? What do you think?

The answer is yes of course, it's been widely recognized that options buying has driven the underlying for some time (i.e., the tail wagging the dog). Note, I agree w above about VIX being momentum rather than directional, but it can be directional within a given context when it's showing that momentum is shifting. While VIX is not always inversely correlated to underlying, it's usually inversely correlated to underlying and, thus, can be used for directional purposes within a given context. But I think we have two different definitions of "determining direction."

Anyway, the point of this post was to ask: are you asking how to use implied volatility as a momentum-shifting indicator?

In addition to VIX and VOLQ, maybe check out the new VIX1D index, if you're intraday trading US equity indices. Read up on it, why it was brought online, how it's calculated, what it's purported to show, and what it actually shows. Mainly, understand how it's calculated. I am not as knowledgeable on it as I wish I was, but I'm in process of learning to use it. Takes time. Ymmv. Read this four times, then, a day or two later, read another four times: https://cdn.cboe.com/api/global/us_indices/governance/Volatility_Index_Methodology_Cboe_1-Day_Volatility_Index.pdf

You can get 15min-delayed VIX1D data on TradingView for free (for studying past days) or you can buy the realtime data package (on top of your "plan" fee). I think VIX1D and VIX are in the "CBOE Global Indices Feed" in TradingView, $4/mn. Your FCM should also offer it if you want it in your trading platform. Since I'm still studying it, I don't have it in my platform.

Peace.

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