Synthetic VIX Indicator

The Synthetic VIX Indicator for MT4 is a market volatility meter that helps traders measure price fluctuations and analyze market sentiment. Originally developed for the S&P 500, it now works for forex pairs, stocks, and other financial assets.

Unlike many complicated volatility indicators, the Synthetic VIX is easy to use, making it ideal for beginners while still offering value for experienced traders.

How Synthetic VIX Calculates Volatility

The indicator calculates volatility using historical price data and a 22-period 

Synthetic VIX Formula:

Synthetic VIX value=Highest(Close,22) – LowHighest(Close,22)\text{Synthetic VIX value} = \frac{\text{Highest(Close,22) – Low}}{\text{Highest(Close,22)}}Synthetic VIX value=Highest(Close,22)Highest(Close,22) – Low​

Finds the highest close over the last 22 bars

Subtracts the current bar’s low

Divides by the highest close over 22 bars

Optionally, multiply by 100 for scaling

The result is a volatility index reflecting the current market state.

How to Use Synthetic VIX Indicator

The Synthetic VIX does not provide buy or sell signals. Instead, it measures market volatility and helps traders anticipate price action.

Rising VIX values: indicate increasing market uncertainty; prices may trend downward

Falling VIX values: suggest declining volatility; prices may trend upward

This makes the indicator particularly useful for sideways or congested markets, helping traders gauge the strength of breakout setups.

Practical Applications

Breakout Trading: Identify the probability and strength of upcoming price breakouts

Swing Trading: Measure market volatility to anticipate potential swings

Trader Sentiment Analysis: Assess whether buyers or sellers dominate market conditions

Advantages of Synthetic VIX Indicator

Real-time volatility tracking for all market conditions

Shows buyer and seller sentiment

Helps identify breakouts and swing patterns

Simple and beginner-friendly

Can be integrated into any trading strategy

Conclusion

The Synthetic VIX Indicator MT4 is a powerful tool for traders who base decisions on market volatility. It works for forex, stocks, indices, and other financial instruments. Its simplicity and effectiveness make it ideal for both beginners and experienced traders.

Download the Synthetic VIX Indicator for free from IndicatorForest.com and start tracking market volatility for smarter trading decisions.