VIX (Volatility Index) – FX Replay Guide

The VIX measures expected volatility in the S&P 500 over the next 30 days and acts as a macro sentiment gauge. While not an FX-specific tool, it’s a powerful overlay for evaluating risk conditions when trading sensitive pairs like JPY, CHF, and USD inside FX Replay.

How FX Traders Use the VIX

Risk Sentiment Filter

• VIX < 12 → Calm market → Favor risk-on trades
  • Example: Long AUD/JPY, short USD/CHF
• VIX > 20 → Rising fear → Favor risk-off setups
  • Example: Long JPY or CHF, short emerging market currencies

Session Planning with VIX in FX Replay

Use VIX context to shape your bias during session opens:

• London or NY session, VIX at 28, equities gapping down
  → Expect volatility surges in GBP/JPY, USD/JPY
• Helps decide: breakout day vs. mean-reversion day

Backtesting Strategy Filters

Track and tag trades by VIX conditions:

• VIX > 30 → Did price fake out or explode?
• VIX < 15 → Were breakouts weaker, trends slower?

Use this to:

• Adjust entry timing
• Modify stop size
• Filter or skip choppy sessions

Correlation Play

When VIX surges:

• Watch for sharp moves in DXY, Gold, or Crude
• Apply intermarket logic to refine your bias during replay

Pro Tip

FX Replay doesn’t plot VIX natively, but you can manually add context:

• Add VIX level as a journal tag in each trade (e.g., VIX = 32)
• Create strategy filters like:
  • “Only enter when VIX < 20”
  • “Scale out if VIX > 30”

Use VIX to:

• Filter entries on high-volatility fakeouts
• Spot macro stress that affects JPY, CHF, or risk pairs
• Align trades with global fear sentiment