Vortex Indicator

The Vortex Indicator tracks directional movement through two paired lines: VI+ sums the absolute distances from each bar's high to the prior bar's low over the lookback, VI- sums the distances from each low to the prior high, and both sums are divided by the total true range over the same window. Upward bar-to-bar reach feeds VI+, downward reach feeds VI-, and the normalization keeps the pair comparable across volatility regimes. Etienne Botes and Douglas Siepman published the design in 2010; this is a straight implementation of the standard calculation with the classic 14-bar length, plotted with a dotted baseline at 1.

How to Trade the Vortex Indicator?

• VI+ crossing above VI-: upward reach has overtaken downward reach — the bullish cross arguing the uptrend has the upper hand.
• VI+ crossing below VI-: the bearish cross, handing the argument to the downtrend.
• Wide separation between the lines: the gap plays the strength role — the wider the spread, the more one-sided recent reach has been.
• Both lines braided around the Baseline: reach and range in balance on both sides — indecision, and the conditions in which crosses degrade into noise.

The pair applies no smoothing, which is a deliberate temperament choice: crossovers arrive faster than on the Wilder-smoothed DMI family and whipsaw more in ranges. Practice compensates externally — a higher-timeframe bias, or a requirement that the crossing line hold above 1 before the signal is honored.

Vortex Indicator Settings

• Length (default 14): the number of bars over which the vortex movements (VM+ and VM-) and the true range are summed. Lengthening toward 21 calms whipsaw at the cost of later crosses; shortening speeds the crosses and multiplies the false ones.

Frequently Asked Questions

How does the Vortex Indicator differ from the DMI?

Both build paired directional lines from bar-to-bar range logic, but DMI adds Wilder smoothing and a separate ADX strength line, buying stability at the cost of speed. The vortex pair skips both: it crosses earlier, whipsaws more, and lets the separation between VI+ and VI- stand in for a strength reading. Same niche, opposite tuning.

What does the baseline at 1 mean?

A line near 1 says that direction's summed reach has been running close to the entire range the market traded over the window. One line well above 1 with the other depressed marks a directional market; both hovering near the baseline means neither side's reach is winning — the signature of chop.

What alerts does the Vortex Indicator build include?

Two alert conditions, one per crossing: Bullish Cross when VI+ crosses above VI-, and Bearish Cross when VI+ crosses below VI-. They mirror the only signal events the two plotted lines generate.