What is Fear and Greed Index?
Fear and greed indices aggregate sentiment indicators into a single risk-on/risk-off score.
Formula
Fear and Greed Components: 1. Stock Price Momentum (S&P 500 vs. 125-day average) 2. Stock Price Strength (52-week highs vs. lows) 3. Stock Price Breadth (advancing vs. declining volume) 4. Put and Call Options (put/call ratio) 5. Market Volatility (VIX index) 6. Safe Haven Demand (stocks vs. bonds returns) 7. Junk Bond Demand (yield spread to investment grade)
Indian market context (NSE)
Reference levels: Nifty 50 at 24,300, Reliance Industries at ₹1,300, Bank Nifty futures at 55,000 (lot size 30). Examples below show how Fear and Greed Index shows up on Indian index, equity, and futures books — update to live quotes in your journal.
Nifty 50 perspective
Fear and Greed Index often appears after Nifty moves 150+ points from open while you waited — journal “Nifty FOMO” entries separately from A-grade setups at 24,300 levels.
Reliance Industries perspective
Fear and Greed Index on Reliance trades is common around results noise at ₹1,300 — rate discipline 1–5 in TradeLyser even when P&L is green.
Bank Nifty futures perspective
Fear and Greed Index after Bank Nifty whipsaws 200 points around 55,000 triggers revenge sizing — enforce max daily loss before re-entering MIS.
How to validate
- Validate Fear and Greed Index tags against time-stamps — impulse entries cluster after losses.
- Compare P&L on tagged vs untagged sessions over 20+ trading days.
- Use mentor review to confirm tag definitions stayed consistent.
- Do not validate solely on one exceptional week of discipline.
How to track in TradeLyser
- Add psychology grade and Fear and Greed Index-related tag on each trade card.
- Use daily journal mood line when Fear and Greed Index risk is elevated.
- Dashboard: count psychology violations per week alongside P&L.
- Share tag definitions with mentor before monthly review.
Best practices
- Separate process score from P&L when reviewing Fear and Greed Index.
- Use cooldown timers after rule breaches involving Fear and Greed Index.
- Sleep on size increases — never add risk the same day as a Fear and Greed Index violation.
- Celebrate disciplined losses that followed the plan.
Common pitfalls
- Labelling trades after the fact to match desired self-image.
- Increasing size to fix a Fear and Greed Index episode immediately.
- Confusing a green day with cured Fear and Greed Index behaviour.
- Skipping tags on “small” impulsive trades.
How to use this in TradeLyser
Optional daily sentiment note; review trades tagged sentiment-driven monthly.
Related terms
Bear market shows lower lows, contracting multiples, and defensive leadership.
Bull market features higher highs, risk-on sentiment, and expanding participation over months.
Discipline is repeatable adherence to entries, exits, size, and pause rules — especially after wins and losses.
India VIX is the NSE’s measure of expected near-term volatility in Nifty options. Rising VIX usually means wider swells and richer option premiums; falling VIX the opposite.
FAQ
CNN index for Nifty?
Use India-relevant sentiment or VIX — note source.
Extreme greed and new longs?
Tag caution weeks — stats may show worse R.
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