VIX regimes: do you adjust your trading to fear levels?
Low VIX means complacency and smooth trends; high VIX means panic and violent reversals. Strategies that don't adapt to the fear regime trade the same way through both — usually badly in one of them.
How do you adapt?
- how you read the current regime
- the changes you make between low and high VIX
- the regime shift that caught you out
The risk-on risk-off guide connects fear to currency flows.
Background: Risk-on, risk-off explained: how market mood moves currencies
When investors feel confident, higher-yielding and commodity currencies tend to rise; when fear takes over, the yen, franc and dollar often gain. How risk sentiment works and how to spot a shift.
What does risk-on mean in forex?
A period when investors are confident and willing to take risk, which tends to lift stocks, higher-yielding currencies and commodity currencies such as the Australian dollar, while the yen and Swiss franc weaken.
Which currencies rise in a risk-off market?
Typically the Japanese yen, the Swiss franc and often the US dollar, as investors look for safety and liquidity.
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