How to Trade Volatility 75 Index (Strategy That Actually Works)

Volatility 75 is one of the most popular synthetic indices on Deriv. Moreover, it’s also where countless traders blow their accounts trying to “beat the system” with Martingale strategies and gut-feeling entries.

Here’s a practical approach to trade Volatility 75 index that focuses on what actually matters: edge, risk management, and consistency.

Understanding Volatility 75 First

Before strategy, understand what you’re trading. Volatility 75 simulates 75% annualized volatility. Therefore, it moves more than Volatility 50 but less than Volatility 100.

Key characteristics:

• Trades 24/7 without closures
• No external news affects it
• Consistent mathematical volatility
• Tick-based price generation
• No gaps or weekend jumps

Additionally, Vol 75 has predictable statistical behavior over large samples. However, individual price movements remain random.

Why Most Vix 75 Strategies Fail

Let’s address common mistakes first. These kill accounts faster than any market movement:

Martingale obsession: Doubling stakes after losses. Works until it doesn’t. Then catastrophic failure. For instance, 10 consecutive losses = 1,024x your initial stake. Your account won’t survive.

No defined edge: Random entries based on “feeling” or recent price direction. As a result, you’re gambling, not trading.

Overtrading: Because Vol 75 trades 24/7, undisciplined traders never stop. Consequently, they accumulate losses through sheer volume.

Ignoring spreads: Every trade costs spread. Therefore, your strategy must overcome this cost plus generate profit.

Chasing price: Entering after big moves, hoping momentum continues. However, mean reversion often follows extremes.

The Foundation: What Creates Edge on Vix 75

Edge comes from exploiting consistent market behavior. On Vol 75, several patterns repeat:

Mean reversion: Extreme moves tend to revert toward average. Therefore, overextended price often returns to equilibrium.

Range-bound behavior: Vol 75 frequently trades in ranges. As a result, buying support and selling resistance works more often than breakout trading.

Volatility clustering: High volatility periods follow high volatility. Low volatility follows low. Consequently, you can adjust strategies based on current market state.

Statistical independence: Each tick is mathematically independent. However, over time, distributions follow normal curves.

Understanding these behaviors doesn’t guarantee profits. Nevertheless, it provides foundation for strategy development.

Strategy 1: Support/Resistance Range Trading

This works during normal market conditions when Vol 75 isn’t trending.

Setup:

• Switch to 1-minute or 5-minute chart
• Identify clear support and resistance levels from recent price action
• Wait for price to touch these levels
• Enter in the direction away from the level (buy at support, sell at resistance)

Entry rules:

• Price must touch the level, not just approach it
• Look for rejection candle (wick showing failed break attempt)
• Enter on the next candle after rejection
• Use 5-10 tick duration or 1-minute options

Risk management:

• Stop loss: 10-15 points beyond the support/resistance level
• Take profit: Opposite side of the range
• Risk-reward ratio: Minimum 1:1.5
• Maximum 3% account risk per trade

When to avoid: During breakouts or trending conditions. Therefore, if price breaks through your level with volume, don’t fight it.

For instance, if support at 1000 holds twice, a third test often succeeds. However, if price consolidates at that level with multiple touches, it becomes stronger.

Strategy 2: Moving Average Bounce

Uses simple moving averages to identify trend and entry points.

Setup:

• Add 20 EMA and 50 EMA to 5-minute chart
• When price is above both MAs, look for buy opportunities
• When price is below both MAs, look for sell opportunities
• Enter when price touches the moving average and bounces

Entry rules:

• Price must be trending (clearly above or below both MAs)
• Wait for pullback to the 20 EMA
• Enter when price forms bullish candle (uptrend) or bearish candle (downtrend) at the MA
• Use 5-10 minute duration

Risk management:

• Stop loss: Below the 50 EMA (uptrend) or above it (downtrend)
• Take profit: When price reaches previous high/low
• Risk-reward: Minimum 1:2
• Trail stop to breakeven after 1:1 is reached

When it works best: During trending sessions. However, Vol 75 trends are shorter than forex trends. Therefore, take profits quickly rather than holding for extended moves.

Additionally, avoid this strategy when price is choppy and crossing MAs frequently. That signals ranging conditions, not trends.

Strategy 3: RSI Divergence

Catches reversals using momentum indicators.

Setup:

• Add RSI (14 period) to 5 or 15-minute chart
• Look for divergence between price and RSI
• Bullish divergence: Price makes lower low, RSI makes higher low
• Bearish divergence: Price makes higher high, RSI makes lower high

Entry rules:

• Wait for divergence to complete (need at least 2 swings)
• Enter when price makes first move in divergence direction
• Confirm with candlestick pattern (engulfing, pin bar, etc.)
• Use 10-15 minute duration

Risk management:

• Stop loss: Beyond the swing high/low that created divergence
• Take profit: Previous swing in opposite direction
• Risk-reward: Minimum 1:2.5
• Exit immediately if divergence fails (price continues in original direction)

Success rate: Roughly 60-65% when executed properly. However, losses are small while wins are large, creating positive expectancy.

Furthermore, RSI divergence works better on Vix 75 than on many forex pairs because volatility remains consistent. Therefore, the indicator behaves more predictably.

Strategy 4: Bollinger Band Squeeze

Exploits volatility expansion after consolidation.

Setup:

• Add Bollinger Bands (20 period, 2 standard deviations) to 5-minute chart
• Wait for bands to squeeze (narrow significantly)
• This signals low volatility that precedes expansion
• Prepare for breakout in either direction

Entry rules:

• When bands are squeezed, place pending orders above and below price
• Buy stop 5 ticks above upper band
• Sell stop 5 ticks below lower band
• Use 10-15 tick duration
• Cancel the opposite order when one triggers

Risk management:

• Stop loss: Middle band (moving average)
• Take profit: 2x the band width
• Risk-reward: Approximately 1:2
• Only take one trade per squeeze setup

Why it works: Vix 75’s mathematical volatility means low-volatility periods reliably precede high-volatility moves. Therefore, squeezes offer high-probability setups.

However, direction is unpredictable. That’s why using both buy and sell pending orders works—one will likely trigger during expansion.

Position Sizing and Risk Management

Strategy means nothing without proper risk management. Here’s the non-negotiable framework:

1% rule: Never risk more than 1% of account per trade. For a $1,000 account, that’s $10 maximum risk per trade.

Position sizing formula: Risk amount / Stop loss distance = Position size

For instance, if you’re risking $10 with a 20-tick stop loss, your position should give you $10 loss at 20 ticks.

Daily loss limit: Stop trading after losing 3% of account in one day. Therefore, maximum daily damage is limited.

Win target: Consider stopping after reaching 5% daily gain. Consequently, you protect profits instead of giving them back.

Drawdown threshold: If account drops 15% from peak, reduce position sizes by 50%. As a result, you survive the drawdown and can rebuild.

Additionally, track your statistics. You need to know your actual win rate, average win/loss, and profit factor. Without data, you’re flying blind.

Common Mistakes to Avoid

Even with good strategy, these errors destroy accounts:

Trading during low liquidity: While Vix 75 trades 24/7, execution quality varies. Therefore, avoid hours when spreads widen (though less of an issue than forex).

Ignoring spread costs: Every trade costs spread. Consequently, scalping with 5-tick targets often results in breakeven or losses once spread is factored in.

Overcomplicating: Adding 10 indicators doesn’t improve results. Instead, it creates confusion and hesitation. Keep it simple.

Revenge trading: After losses, doubling down to “get even.” However, this emotional response accelerates account destruction.

No trade journal: Without tracking results, you can’t identify what works. Therefore, keep detailed records of every trade including emotional state.

For more advanced concepts, explore [How to Trade Volatility 75 Index (Strategy That Actually Works)] to build proper foundation.

Testing Your Strategy

Before risking real money, validate your approach:

Demo testing: Open a Deriv demo account and trade your strategy for 100-200 trades. Track results meticulously.

Performance metrics to track:

• Win rate (target: 55%+ for mean reversion, 45%+ for trend following)
• Average win vs average loss (need positive risk-reward)
• Maximum consecutive losses (prepare emotionally and financially)
• Profit factor (total wins / total losses, target: 1.5+)
• Maximum drawdown (keep under 30%)

Moving to live: Start with minimum stakes. Therefore, emotional impact is reduced while you adjust to real money psychology.

Gradually increase position sizes only after proving consistency over 50+ live trades. Consequently, you scale success rather than losses.

The Reality of Vix 75 Trading

No strategy wins every trade. In fact, expect to lose 40-50% of trades even with good systems. However, proper risk-reward ratios mean you profit overall.

Realistic expectations:

• 5-10% monthly returns are excellent
• Losing weeks happen to everyone
• Patience and discipline matter more than strategy complexity
• Most traders fail due to psychology, not bad strategies

Moreover, Vix 75 isn’t a get-rich-quick vehicle. Instead, it’s a market where consistent, disciplined traders can extract reliable returns over time.

Your Next Steps

You now have several proven strategies for Vix 75. However, knowledge without action means nothing.

Action plan:

Choose one strategy from this guide. Don’t try all of them simultaneously.

Test it on demo for minimum 100 trades. Track results in spreadsheet.

If profitable after 100 trades, move to live with minimum stakes. Continue for another 50 trades.

Only after proving consistency should you increase position sizes.

Additionally, continue learning. Visit [Internal link: thekingdomfunded.com] for more practical trading resources and strategy breakdowns.

Vix75 rewards patience, discipline, and systematic approaches. Start building yours today.