Created by Adam White, the Vertical Horizontal Filter helps the user determine whether a particular price is trending. The higher the Vertical Horizontal Filter value, the more a particular contract is trending. In addition, the direction of the Vertical Horizontal Filter shows what phase the Vertical Horizontal Filter is entering:
- A rising Vertical Horizontal Filter means that prices are trending.
- A falling Vertical Horizontal Filter means that prices are stablizing around a specific range.
Selecting the Vertical Horizontal Filter allows you to set the Period (as number of minutes) and the color of the result.
Configuration Options
- Period: Number of bars to use in the calculations.
- Color Selectors: Colors to use for graph elements.
- Display Axis Label: Whether to display the most recent value on the Y axis.
Formula
The Vertical Horizontal Filter is calculated as follows:
\[ VHF = \frac{ABS(High Closing Price – Low Closing Price)}{ \sum_{j=1}^{n}ABS(Close_{j} – Close_{j-1})} \]