Synthetic VIX Metatrader 5 Forex Indicator
The Synthetic VIX custom Metatrader 5 indicator is not a directional indicator. The indicator is used to identify increase or decrease of volatility.
The indicator is based on Larry Williams’ TASC articles “Fix the VIX”:
In the words of Bernard Baruch, he described the market with these words: “Market fluctuate.”
The Synthetic VIX idea is embodied in the Chicago Board Options Exchange (CBOE) Volatility Index (VIX), which has become quite popular in gauging market risk since its inception in 1993.
The Volatility Index which is drawn from the implied volatility of stock index options, seeks to reveal traders’ expectations of volatility over the next 30 days.
Basically, the VIX mirrors investor worries – high readings are linked with high-volatility conditions (and market troughs), while low readings are linked with low-volatility conditions (and market peaks).
VIX was originally calculated for only the S&P 500 Index, Dow Jones Industrial Average and NASDAQ Composite Index. Luckily, the VIX can be duplicated for the forex market or any other market – using a simple formula.
The Synthetic VIX has a single input parameter:
Synthetic VIX period – defines the period for calculating the Synthetic VIX
It is important to pair up the Synthetic VIX MT5 custom forex indicator with other relevant indicators for a fine blend.
MT5 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 5
Type: chart window indicator
Customization options: Variable (Synthetic VIX period), Colors, width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Copy and paste the Synthetic VIX.ex5 indicator into the MQL5 indicators folder of the Metatrader 5 trading platform.
You can access this folder from the top menu as follows:
File > Open Data Folder > MQL5 > Indicators (paste here)