Vortex

What is the Vortex Indicator?

The Vortex Indicator (VI) is a two-line trend tool published by Etienne Botes and Douglas Siepman in 2010, named for an analogy to vortex flows observed in nature. The positive line, VI+, sums the absolute distances from each bar's high to the prior bar's low over the lookback; the negative line, VI−, sums the absolute distances from each bar's low to the prior bar's high; both sums are divided by the total true range over the same window, with 14 periods a common default. Upward bar-to-bar reach feeds VI+, downward reach feeds VI−, and the normalization keeps the pair comparable across volatility regimes.

Signals are read from the pair: VI+ crossing above VI− argues the uptrend has the upper hand, the opposite cross argues for the downtrend, and wide separation is taken as trend strength while braided, overlapping lines mark chop. It occupies the same niche as the ADX/DMI system but derives direction from bar-to-bar reach rather than Wilder's directional movement, and because it applies no Wilder smoothing and has no separate strength line, its crossovers tend to arrive faster and whipsaw more in ranges.

How traders use it

• As a trend-change trigger: crossovers of VI+ and VI− flag directional turns, usually filtered by a higher-timeframe bias or a smoothing pass because raw crosses are frequent in ranges.
• As a strength gauge: the spread between the lines, or one line holding at an elevated level, qualifies whether a trend is worth following.
• As confirmation for other systems, for example only honoring breakouts when the vortex pair already leans the same way.