>>20756246When short term volatility is lower than mid-term, equities tend to do well. When short term vol is elavated relative to mid-term equities underperform VIX futures shorts (surprising but true). When short term is significantly above mid-term both equities and short vol gets hammered but at the extreme long vol, (VXX, Vix futures longs, etc.) does well but you have to be really quick in and out and the probability is lower than the other situations. Backtest pic related VIX6M/VIX and you'll find there are clear ratios where if you're above the ratio you should be in equities. Below that, you're better off getting out of equities and getting in SVXY, SVIX, and Vix futures shorts. When you get below that level you're better off in cash equivalent and when it gets really low, i.e. short term Vix is signficantly higher than mid-term you want to go long Vix contracts though, again, that is tricky. Do the backtesting and you'll see what I mean. It's basically trend following but instead of price it's based on volatility. This performs well since leveraged ETFs, the stuff I trade off this idea, are very sensitive to volatility. This strategy would have saved you from volmageddon and would have gotten you out before the first dump in March 2020 unlike the 200 day moving average strategy where you would have took a big hit in both situations
