The best indicator for Volatility Index (VIX)
We backtested 20 indicators across daily, weekly and hourly charts on real Volatility Index (VIX) history. Here's what actually worked — risk-adjusted, out-of-sample, with costs.
Williams %R
On the daily chart, this is the strongest risk-adjusted edge we found for Volatility Index (VIX) over ~36.4 years — beating buy-and-hold by 85.6% CAGR.
The winner on each chart
Every indicator, ranked
Ranked by Sharpe (risk-adjusted return). Hypothetical, fees included.
| # | Indicator | TF | CAGR | Sharpe | Max DD | Win | Trades | vs B&H |
|---|---|---|---|---|---|---|---|---|
| 1 | Williams %R ✓ | Daily | 86.2% | 1.22 | -60.6% | 70.2% | 282 | 85.6% |
| 2 | Stochastic ✓ | Daily | 84.6% | 1.21 | -53.4% | 70.0% | 233 | 83.9% |
| 3 | CCI ✓ | Daily | 62.8% | 1.08 | -52.2% | 68.3% | 224 | 62.2% |
| 4 | Bollinger Mean-Reversion ✓ | Daily | 26.7% | 0.92 | -39.5% | 82.8% | 93 | 26.1% |
| 5 | Stochastic ✓ | Weekly | 51.7% | 0.86 | -56.6% | 84.9% | 53 | 51.5% |
| 6 | CCI ✓ | Weekly | 38.2% | 0.82 | -50.2% | 82.8% | 58 | 38.0% |
| 7 | WaveTrend (8/6/4) ✓ | Daily | 36.3% | 0.76 | -70.1% | 68.7% | 147 | 35.7% |
| 8 | Williams %R ✓ | Weekly | 32.5% | 0.7 | -59.5% | 78.4% | 51 | 32.3% |
| 9 | WaveTrend (8/6/4) ✓ | Weekly | 19.9% | 0.58 | -67.1% | 75.9% | 29 | 19.7% |
| 10 | ADX / DMI ✓ | Weekly | -6.8% | 0.32 | -97.8% | 34.8% | 23 | -7.0% |
| 11 | Bollinger Mean-Reversion | Weekly | 6.0% | 0.41 | -18.6% | 77.8% | 9 | 5.8% |
| 12 | RSI Mean-Reversion ✓ | Daily | 3.7% | 0.44 | -14.8% | 87.5% | 8 | 3.1% |
| 13 | SMA 50/200 Cross ✓ | Weekly | -7.3% | 0.18 | -98.4% | 22.2% | 9 | -7.5% |
| 14 | SMA 50/200 Cross ✓ | Daily | -22.6% | 0.01 | -100.0% | 15.0% | 40 | -23.2% |
✓ = held up out-of-sample. Hypothetical, costs included. See methodology.
For Volatility Index (VIX), Williams %R on the daily timeframe gave the best balance of return and risk in our test. It beat buy-and-hold — but remember: this is a hypothetical backtest of a standard rule, not a recommendation. Markets change. See the methodology and disclaimer.
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