Without volatility, there are no big opportunities in trading. The Volatility Index indicator is very useful when you want to discover the popularity of the market. This indicator is also helpful for buying at an early stage and selling when the market popularity reaches its highest value. For novice traders, this indicator can help them avoid chasing the market blindly.
This indicator works on the principles of equal volume and compression charts. It allows you to combine changes in price and volume at the same time.
How to use
- If the indicator value continously increasing, and the volume is also increasing. This will be a positive sign for price rise. Similarly, if the indicator value and the volume both are decreasing, it is the indication to sell the assets before the prices start falling.
- When the indicator value crosses the 0 axis from bottom to top, it is the medium buy signal. Similarly, if the value crosses the 0 axis from top to bottom, it indicates a sell signal.
- The crossing of the zero axis is more reliable than any other indicator.
- This indicator is more suitable for medium- and long-term price trends. It is recommended to use this indicator in long-term trading opportunities.
- You can achieve better results by using this indicator with the DMI trend indicator.
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