The best indicator for Volatility Index (VIX)
We backtested 382 indicators across daily, weekly and hourly charts on real Volatility Index (VIX) history. Here's what actually worked — risk-adjusted, out-of-sample, with costs.
Where Volatility Index (VIX) stands
Computed from our own daily OHLCV history, not quoted from a third party. Moving averages use closing prices; "52-week" is the last 252 trading sessions.
MA Envelope
On the daily chart, this is the strongest risk-adjusted edge we found for Volatility Index (VIX) over ~36.4 years — beating buy-and-hold by 119.8% CAGR.
Volatility Index (VIX) on the daily chart
The timeframe our backtest found best for this asset. The chart is live market data; the results above are hypothetical and historical.
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Best multi-indicator combo
Going long only when all 2 agree was the strongest confluence setup we found for Volatility Index (VIX) — beating buy-and-hold by 55.3% CAGR, out-of-sample. Fewer, higher-conviction trades than any single indicator.
The winner on each chart
Every indicator, ranked
Ranked by Sharpe (risk-adjusted return). Hypothetical, fees included.
| # | Indicator | TF | CAGR | Sharpe | Max DD | Win | Trades | vs B&H |
|---|---|---|---|---|---|---|---|---|
| 1 | MA Envelope ✓ | Daily | 120.4% | 1.52 | -51.9% | 65.6% | 628 | 119.8% |
| 2 | Projection Bands ✓ | Daily | 96.9% | 1.37 | -48.9% | 71.2% | 420 | 96.3% |
| 3 | Connors RSI ✓ | Daily | 77.3% | 1.36 | -36.7% | 65.5% | 496 | 76.7% |
| 4 | Connors RSI-2 ✓ | Daily | 58.8% | 1.25 | -42.4% | 65.4% | 442 | 58.2% |
| 5 | Murrey Math Lines ✓ | Daily | 99.2% | 1.25 | -65.7% | 81.6% | 174 | 98.6% |
| 6 | Fibonacci Pivots ✓ | Weekly | 83.6% | 1.24 | -51.7% | 52.5% | 343 | 83.5% |
| 7 | Williams %R ✓ | Daily | 86.2% | 1.22 | -60.6% | 70.2% | 282 | 85.6% |
| 8 | MA Envelope ✓ | Weekly | 88.4% | 1.22 | -49.7% | 63.2% | 190 | 88.2% |
| 9 | Pivot Points (Standard) ✓ | Weekly | 59.6% | 1.1 | -55.1% | 49.8% | 283 | 59.4% |
| 10 | CCI ✓ | Daily | 62.8% | 1.08 | -52.2% | 68.3% | 224 | 62.2% |
| 11 | Projection Bands ✓ | Weekly | 74.9% | 1.07 | -60.7% | 76.9% | 104 | 74.7% |
| 12 | Camarilla Pivots ✓ | Weekly | 58.5% | 1.06 | -54.2% | 47.2% | 428 | 58.3% |
| 13 | Stochastic ✓ | Daily | 71.0% | 1.02 | -66.6% | 72.4% | 156 | 70.4% |
| 14 | Markov Regime ✓ | Weekly | 61.8% | 1.01 | -56.6% | 56.6% | 152 | 61.6% |
✓ = held up out-of-sample. Hypothetical, costs included. See methodology.
What it would take to beat buy & hold on Volatility Index (VIX)
47 of 641 tested setups beat buy-and-hold on Volatility Index (VIX) outright. Another 0 could get there with leverage they would survive — but 4 would be liquidated by their own drawdown before they caught it.
| Indicator | Beats B&H unlevered | Leverage needed | Leverage survived |
|---|---|---|---|
| Williams %R | 2 | none needed | 1.85× |
| CCI | 2 | none needed | 2.7× |
| Detrended Price Osc. | 2 | none needed | 1.23× |
| Connors RSI-2 | 2 | none needed | 3.03× |
| Stochastic RSI | 2 | none needed | 1.7× |
| Schaff Trend Cycle | 2 | none needed | 1.48× |
Out-of-sample, costs included. A setup is only listed if the leverage it needs is less than the leverage its own worst drawdown survives — when it isn't, no amount of leverage gets there. Volatility drag isn't modelled, so these are the optimistic case. Every indicator, ranked this way
For Volatility Index (VIX), MA Envelope on the daily timeframe gave the best balance of return and risk in our test. It beat buy-and-hold — but remember: this is a hypothetical backtest of a standard rule, not a recommendation. Markets change. See the methodology and disclaimer.
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