Fear & Greed Extremes
Market extremes often signal the best paper trading setups — here's how to read them.
Understanding VIX Extremes
- ▲VIX above 30: Extreme fear — historically a mean-reversion buying opportunity for contrarians
- ●VIX 15–25: Normal volatility — trend-following strategies tend to work best
- ▼VIX below 12: Extreme complacency — options become cheap; watch for reversals
How Traders Use Fear & Greed
- ✓ Elevated VIX expands option premiums — sellers may collect more credit
- ✓ Sharp VIX spikes often coincide with capitulation — watch for reversal candles
- ✓ Sustained low VIX can precede complacency-driven sell-offs
- ✓ Paper trade these setups first before risking real capital
Practice Volatility Trades
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