How to trade volatility index 75?

The best strategy we have found to be more effective is the Btmm strategy by Steve Mauro.

Which broker is best for synthetic indices?

Deriv is the best broker for indices trading as it offers competitive spreads, real-time markets and a wide range of indices.

Why do traders like volatility?

Volatility in thee markets presents opportunities for traders to make significant profits in a short space of time. However it is also important that volatility also increases the risk of losing all the investment.

Volatility 75 Index Brokers

Allen Matshalaga, C.E.O of the AVFX Trading HUB company.

Deriv Strategy

Updated: Feb, 2024

5min Read

The Volatility Index also famously known as VIX is an index for measuring fear in the markets. It is the algorithm captured from measuring the S&P500 stock market’s volatility and can only be traded on MT5 platforms, such as Deriv Trading.

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Table of Contents

Does MT4 have Volatility 75 Index?
List of V75 Brokers
Deriv
Pepperstone
Hot Forex
IFC Markets
V75 Strategy Overview
Steps to Taking a Trade
Sell Signal Setup
Buy Signal Set Up
How to Enter a V75 Trade
When to Exit a V75 Trade
V75 Index Trading Rules
Volatility index Trading Students' Results
How to trade volatility index 75?
Which broker is best for synthetic indices?
What is another name for volatility 75?
Why do traders like volatility?

Does MT4 have Volatility 75 Index?

MetaTrader 4 (MT4) does not have the “Volatility 75 Index.” MT4 primarily offers trading on forex pairs, commodities, and other financial instruments but does not have the Volatility 75 Index.

List of V75 Brokers

Here is a list of regulated brokers which offer this type of indices trading worldwide:

Deriv

Deriv is a top-notch online trading platform used by over 2.5 million traders worldwide. It offers forex, commodities, and other financial instruments, making it accessible to traders around the world. They've earned recognition for their online services, including Deriv GO, a mobile platform for trading on the move with unique features across financial and derivative markets 24/7.

Trade on Deriv

Pepperstone

Pepperstone is an Aussie online broker offering lots of ways to trade, like Forex, Cryptocurrencies, Indices, Commodities, and Shares. There are different accounts to pick from, like the Standard one for basic trading, the Razor one for fancier options with lower spreads but a commission fee, and the Swap-Free one for Islamic traders.

Hot Forex

HotForex, now called HF Markets (HFM), is a widely recognized forex and commodities broker that offers trading services to both regular traders and big institutions. HotForex stands out by its Zero Spread account with spreads starting from 0 pips.

Trade on Hot Forex

IFC Markets

IFC Markets, a key part of the IFCM Group, is a top global provider for Forex and CFD trading. They offer a variety of financial instruments, such as currencies, stocks, indices and cryptocurrencies, and are known for their fixed low spreads and clear interbank swap rates.

V75 Strategy Overview

Trading Type

Scalping

Timeframes

5 minutes (M5), 15 minutes (M15), 30 minutes (M30) and 1 Hour (H1)

Trade Execution Timeframe

5 minutes (M5)

Signal Detection Timeframe

15 minutes (M15)

Confirmation Timeframe

30 minutes (M30) and 1 hour (H1)

Indicators

Bollinger Band, Relative Strength Index (RSI), Stochastic Oscillator and MACD

Below is a list explaining the function(s) of all indicators to be used in the strategy:

Bollinger Band:- Measures Volatility.
Relative Strength Index (RSI):- Measures Market Exhaustion.
Stochastic Oscillator:- Measures Momentum.
MACD:- For Direction and Momentum.

Steps to Taking a Trade

Step 1: Setup all indicators on your MT5 app, please ensure all parameters are 100% correct and check again to confirm.

Step 2: To detect a potential trading signal for further analysis, switch your chart to M15 (15 minutes timeframe).

Step 3: Execute.

Sell Signal
✓ Stochastic Oscillator (Blue Line) must reach the 80 level.
✓ RSI (Black Line) must reach the 70 level.
✓ MACD histogram forms a peak.
✓ The price must touch the upper Bollinger Band.
✓ Candlestick rejections forms.
✓ Check again to be sure.

Sell Signal Setup

Buy Signal
✓ Stochastic Oscillator (Blue Line) must reach the 20 level.
✓ RSI (Black Line) must reach the 30 level.
✓ MACD histogram forms a trough.
✓ The price must touch the lower Bollinger Band.
✓ Candlestick rejections forms.
✓ Check again to be sure.

Buy Signal Set Up

When all the conditions for a sell or buy have been met on the M15, draw a straight line to mark out the anticipated reversal point.

After drawing a line on the M15, move to the 5 minute for further confirmation. Take the following actions if you see any of the following on the M5:

Scenario 1
Scenario 2
Scenario 3

All the conditions met on M15 are also met M5

Action: Mark as HIGH POTENTIAL SET UP.

All the conditions met on M15 are not met on M5

Action: DISCARD THE TRADE IMMEDIATELY and wait for another signal on M15.

All the conditions met on M15 are about to be met on M5.

Action: WAIT PATIENTLY for a complete signal formation on the 5 minute timeframe, before entering.

In the case of Scenario 1, you must carry out the following simple analysis before entering your trade:

Switch to M30 and H1 timeframes to check if the price is moving in a direction opposite to your short-term prediction.

If this is the case, DON’T ENTER A TRADE. This is because a strong fake reversal might occur which will most likely hit your stop loss.

Example:
The conditions for SELL have been met on M15 and confirmed on M5. But when you checked M30 and H1, you noticed that the BUYING POWER is high.

This means price might not respect the signal and move along with the trend instead. To detect the trend direction on both M30 and H1, you will check the crossover on Stochastic Oscillator and MACD histogram formation.

BUY BIAS:
Stochastic Blue line crosses the Red and moves upward, while the MACD predicts an upward movement.

SELL BIAS:
Stochastic Blue line crosses the Red and moves downward, while the MACD predicts a downward movement. If all these conditions are met, you can safely enter your trade on MT5.

TIP: Always set a stoploss and don't use a lot size that is too big for your account size.

Allen Matshalaga

Author

How to Enter a V75 Trade

All trades should be executed and monitored on M5 only.
Before entering a trade, decide on the lot size to use depending on the size of your account. (We have a different guide on that).
In this strategy, we won’t be making use of Instant Execution option, instead, we will make use of Stop Orders (SELL STOP or BUY STOP). This will prevent us from entering the market too soon.
When all your signals have formed on all timeframes, switch to M5 and place a STOP ORDER few PIPS below (For a SELL TRADE) or above (For a BUY TRADE).
Stop loss should be placed a few pips above the highest or lowest candlestick (depending on the type of trade). Note that there is always a possibility of a retest before the final movement.

When to Exit a V75 Trade

There are methods you can use to determine when the movement is done:

1. The Bollinger Band

Price reaches the middle band or
Price reaches the last band

2. The Stochastic Oscillator

The blue Stochastic line touches the opposite level e.g. For a SELL trade, the line moves from 80 level and approaches 20. Vice versa for BUY.

3. Constant PIP target per trade

I personally target 100 pips per trade irrespective of the movement. This 1000.0000 points per trade based on observation.
You must monitor 1 and 2 to determine when to opt out of a trade prematurely.

There is a separate guide on how to calculate the number of pips on the Volatility 75 Index. Study it well.

V75 Index Trading Rules

Don’t be greedy. Make use of stop-loss and appropriate lot size.
Your total opened positions should be equivalent to your normal lot size
depending on your capital.
Have a daily profit target to eliminate greed or overtrading.
If a signal is not complete, don’t trade it.
If you are not confident with the strategy, don’t trade it.
Make sure you read articles on all indicators during your back-testing period.
Don’t trade an amount you can’t afford to lose.
Be confident in yourself as a trader.
If you are a new trader and you are not familiar with any of the terms mentioned above, please Google them out or register for a foundation training program.
Trading is risky irrespective of the strategy. This strategy works for me and my students, I hope it works for you also.

REGISTER FOR A TRADING ACCOUNT TO GET STARTED!

Volatility index Trading Students' Results

Conclusion

Volatility 75 index is more volatile as compared to other indices and most traders lose their investments when trading it. The Deriv Broker is an excellent choice when looking for a regulated and legit broker, offering a wide range indices, including multipliers, CFDs and Cryptocurrencies. With a beginner friendly interface and and a quick deposit and withdrawal system, Deriv is by far the best broker for indices.

Frequently Asked Questions

How to trade volatility index 75?
The best strategy we have found to be more effective is the Btmm strategy by Steve Mauro.
Which broker is best for synthetic indices?
Deriv is the best broker for indices trading as it offers competitive spreads, real-time markets and a wide range of indices.
What is another name for volatility 75?
The volatility index also famously known as vix is an index for measuring fear in the markets.
Why do traders like volatility?
Volatility in thee markets presents opportunities for traders to make significant profits in a short space of time. However it is also important that volatility also increases the risk of losing all the investment.