Showing posts with label vortex-indicator-settings. Show all posts
Showing posts with label vortex-indicator-settings. Show all posts

VORTEX INDICATOR

VORTEX INDICATOR

 

VORTEX INDICATOR


The Vortex Indicator is a technical indicator invented by Etienne Botes and Douglas Siepman to identify the start of a new trend or the continuation of an existing trend within financial markets. It was published in the January 2010 edition of Technical Analysis of Stocks & Commodities. 


The Vortex Indicator was inspired by the work of an Austrian inventor, Viktor Schauberger, who studied the flow of water in rivers and turbines. Etienne Botes and Douglas Siepman developed the idea that movements and flows within financial markets are similar to the vortex motions found in water. The Vortex Indicator was also partly inspired by J. Welles Wilder's concept of directional movement, which assumes the relationship between price bars gives clues as to the direction of a market. 


A vortex pattern may be observed in any market by connecting the lows of that market’s price bars with the consecutive bars’ highs, and then price bar highs with consecutive lows. The greater the distance between the low of a price bar and the subsequent bar’s high, the greater the upward or positive Vortex movement (VM+). Similarly, the greater the distance between a price bar’s high and the subsequent bar’s low, the greater the downward or negative Vortex movement (VM-).


VORTEX INDICATOR


On a chart, VI+ and VI- will be seen to intersect each other at a change of trend, and begin to diverge ever wider as the strength of a trend increases. When VI+ is larger and above VI-, the market is trending up. Conversely, when VI- is bigger and above VI+, the market is trending down.


On a chart, VI+ and VI- will be seen to intersect each other at a change of trend, and begin to diverge ever wider as the strength of a trend increases. When VI+ is larger and above VI-, the market is trending up. Conversely, when VI- is bigger and above VI+, the market is trending down. A trader should focus on the key trend change points of the Vortex Indicator (i.e. the crossing points of VI+ and
VI-). When VI+ crosses above VI-, a long (buy) position is indicated. A short or sell position is suggested when VI- crosses above VI+.

VORTEX INDICATOR
A Vortex Pattern in the Market: By connecting the lows of price bars with the consecutive bars’ highs, and then price bar highs with consecutive lows, one can observe a vortex pattern in the market.


VORTEX INDICATOR
The Vortex Indicator: The greater the distance between the low of a price bar and the subsequent bar’s high, the stronger the positive Vortex movement (VM+). Similarly, the greater the distance between a price bar’s high and the subsequent bar’s low, the stronger the negative Vortex movement (VM-).


 ********

Share: