Tell me what are the best Market Volatility Indicators?
7/27/2025 11:28pm
The best market volatility indicators are those that provide a comprehensive understanding of volatility patterns and help traders and investors make informed decisions. Here are the top indicators:
1. **Cboe Volatility Index (VIX)**: Often referred to as the "fear gauge," the VIX is a widely used indicator of market volatility. It measures the implied volatility of the S&P 500 Index over the next 30 days and is calculated using options prices. VIX values above 30 indicate high volatility, while values in the low teens suggest low volatility.
2. **Average True Range (ATR)**: The ATR is a measure of the average range between a security's high and low prices over a given period. It is useful for tracking volatility over time and can suggest when a bottom is approaching.
3. **Bollinger Bands**: This indicator consists of an upper and lower band placed on either side of a simple moving average (SMA). The bands widen during periods of high volatility and narrow during periods of low volatility.
4. **Chaikin Volatility Indicator**: Developed by Marc Chaikin, this indicator calculates the difference between the high-low average and the average of a few periods ago, then divides by the high-low average of those periods ago. It helps identify potential trend reversals and can indicate increasing volatility.
5. **Twiggs Volatility Indicator**: This indicator signals increased market risk and is used to indicate rising volatility.
6. **MACD**: While not exclusively a volatility indicator, MACD (Moving Average Convergence Divergence) can be used to identify potential entry and exit points for trades and can indicate increasing or decreasing volatility.
7. **VIX Futures and Options**: These derivatives allow traders to hedge portfolios or express a bullish, bearish, or neutral outlook for broad market implied volatility.
8. **Bollinger & Supertrend Hybrid Pro**: This is a trend-following and volatility mapping tool that combines the adaptability of Bollinger Bands with the trend direction highlighting of the Supertrend indicator.
These indicators should be used in conjunction with each other and with other market analysis tools to gain a complete understanding of market conditions.