Vortex Indicator

The Vortex Indicator consists of two oscillators (VI+ and VI-) used for identifying the start and direction of a market trend. When the VI+ and VI- cross, it generally indicates a market trend. The trend is up when VI+ stays above VI-, and the market trend is down when VI- crosses below VI+.

Configuration Options

• Period: Number of bars to use in the calculations.
• Color Selectors: Colors to use for graph elements.
• Over Zones Enabled: Whether to shade the area between the plot and the horizontal overbought and oversold levels.
• Over Bought: Overbought quantity
• Over Sold: Oversold quantity
• Display Axis Label: Whether to display the most recent value on the Y axis.

Formula

The calculation for the indicator is divided into three parts:

1. Uptrend and downtrend movement:
   • \( VM+ = {Current High} - {Prior Low} \)
   • \( VM- = CurrentLow - PriorHigh \)
   • \( \sum_{n=1}^{x} VM\verb "+" \)
   • \( \sum_{n=1}^{x} {VM\verb "-"} \)
   Where "x" is the number of price bars or periods the indicator will look at (between 14 and 30 is common).
2. True Range (TR) is the greatest of:
   • \( CurrentHigh - CurrentLow \)
   • \( \left | CurrentHigh - PrevioiusClose \right | \)
   • \( \left | CurrentHigh - CurrentLow \right | \)
   • \( \left | CurrentHigh - CurrentLow \right | \)
3. Normalize uptrend downtrend movement:
   • \( VIx+ = \frac{VMx+}{TRx} \)
   • \( VIx- = \frac{VMx-}{TRx} \)