Vortex Indicator
Trend indicator measuring upward and downward vortex movement; VI+ crossing above VI− signals a new uptrend, below signals a downtrend.
Formula
+VM = |High_t − Low_{t-1}|; −VM = |Low_t − High_{t-1}|;
VI+ = Σ(+VM, n) / ATR_n_sum; VI− = Σ(−VM, n) / ATR_n_sumThe Vortex Indicator computes two lines: VI+ measures upward trend movement by summing the distance from today's high to yesterday's low, and VI− measures downward movement by summing the distance from today's low to yesterday's high, both over 14 periods and normalised by ATR.
Signals are generated when the two lines cross: VI+ above VI− = bullish, VI− above VI+ = bearish. The Vortex Indicator is broadly similar to DMI in concept but uses a different computation. It reacts relatively quickly to trend changes, making it useful for short-term swing traders as well as longer-term trend followers.
Related Terms
Aroon
Trend-detection indicator showing how recently the n-period high and low were set; near-100 Aroon Up signals a strong uptrend.
IntermediateAverage Directional Index (ADX)
Non-directional trend-strength gauge (0–100); readings above 25 indicate a trending market, below 20 suggest a range.
IntermediateDirectional Movement Index (DMI)
System of +DI and −DI lines measuring upward and downward price movement; the gap between them, normalised as ADX, quantifies trend strength.
AdvancedSuperTrend
ATR-based trailing stop-and-trend indicator that flips above or below price to define bull and bear regimes; clean, actionable signals.
Intermediate