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[Professional Writer]

Trading the volatility index that is often called the VIX has become the central point of fear and uncertainty, seeking to understand proper directions to follow in the financial markets. It is another field compared to the stock market or currency trading, because VIX is not a direct trade, but the projections of expected volatility, hence easier ways exist to get around it using exchange-traded funds (ETFs), notes (ETNs), futures or options. The first thing is to comprehend the VIX—the VIX will show its spikes when the markets experience uncomfortable conditions and vice versa, the VIX will go down when the investors feel the peace of mind. Basically, if you believe that the market will be shocked and affected by the change, you can see the possibility of buying VIX futures or only one product—long VIX ETF and make a profit from the situation. However, in case of the opposite scenario, when the market gets normalized after a panic, the best strategy is to sell short through inverse ETFs or VIX options, which might also boost the profits. Be aware that timing of the decision is also very important as volatility can impact rapidly and you may end up spending all the money. Besides that, make sure that you understand the decay aspect of the VIX-based instruments, primarily the reset every day of the ETFs, because without being wise you could lose the amount you had earned. Another piece of advice is to be more accurate in managing your risk and not take the VIX as a gambling ticket. On the other hand, it should be noted that the VIX is one of many instruments in wealth building. Still, if you are a person who has no experience in this area, make simulations before going real, and watch the way volatility behaves with the news from around the world, financial reports, and economic data. The main thing to remember is playing smart and not going off track; it can be done by basing trades on strategies, not solely on the moves, and by knowing that volatility trading is not about the place a market is moving to, but about the change itself.

 

[kerryjoy]

I've recently started trading the VIX, and wow, it's a completely different animal than stocks or forex. It's interesting to me that you're betting on change rather than direction. You can make some significant moves with VIX futures or long ETFs when the VIX spikes during market turbulence. However, timing is crucial. I've discovered the hard way that your gains can quickly disappear if you're late or don't take decay into account when investing in those ETFs. It's all about discipline and strategy, so I try not to think of it like a lottery ticket. Start with paper trading if you're new to it. If you're not prepared, volatility will devour your finances.