High/Low VIX Trading Strategies

Now that the VIX has begun to show momentum, it is prudent that one should switch their trading style to a shorter term holding strategy. The higher the VIX goes, the shorter term your holding period should become. Back in 2008 with the VIX at astronomical levels, only short term trades had a high probability of giving decent gains. I remember that if one didn't sell their trades in a day or two, they would get pummelled the next day. So for high VIX market, do short term trades on stocks breaking out and showing strength. Also note that in high distress time periods, most stocks making significant moves are lower quality, speculative stocks.

Once the VIX tops out and drifts lower, we tend to find more higher quality stocks breaking out. Also, a lower VIX allows us to hold positions for longer time periods which is key in reaping high returns from trades.