Two oscillating lines that identify new trend initiation with remarkable clarity.
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Overview
The Vortex Indicator was developed by Etienne Botes and Douglas Siepman and introduced in Technical Analysis of Stocks & Commodities magazine in January 2010. Inspired by the movement of water in a vortex, the indicator uses the relationship between the current bar's range and the prior bar's extreme points to measure upward and downward trend movements.
The indicator consists of two lines: VI+ (positive vortex) measures upward trend movement, and VI− (negative vortex) measures downward trend movement. Both are calculated as rolling sums of directional movement divided by the rolling sum of True Range over a lookback period (default 14).
VI+ = Sum of |Current High − Previous Low| over N periods ÷ Sum of True Range over N periods VI− = Sum of |Current Low − Previous High| over N periods ÷ Sum of True Range over N periods
When VI+ crosses above VI−, a new upward trend is beginning — this is the buy signal. When VI− crosses above VI+, a new downward trend is initiating — this is the sell signal. The magnitude of the separation between the two lines indicates the strength of the current trend.
The Vortex Indicator has an important distinction from similar crossover indicators: it is designed specifically to identify trend initiation (the beginning of new trends), not continuation. The clearest signals occur after periods of consolidation when the two lines are crossing frequently, indicating the market is deciding its direction. Once the lines separate clearly, the new trend is confirmed.
The indicator performs best on daily and weekly timeframes for equity and crypto markets. Combined with an ADX filter (trade VI crossovers only when ADX is rising above 20), it dramatically reduces false signals during choppy markets.
Strategy Code
This is a TradingView Pine Script example for this indicator. Paste it into the TradingView Pine Editor, add it to your chart, and adjust inputs for your market and timeframe.
//@version=6
strategy("Vortex Indicator", overlay=true)
fastLen = input.int(20, "Fast Length")
slowLen = input.int(50, "Slow Length")
fast = ta.ema(close, fastLen)This is a thinkorswim ThinkScript example for this indicator. Open thinkorswim, create a custom study, paste the script, and apply it to your chart.
input length = 14;
def viPlus = Vortex(length = length)."VI+";
def viMinus = Vortex(length = length)."VI-";
def buySignal = viPlus crosses above viMinus;
def sellSignal = viMinus crosses above viPlus;Join thousands of traders who use auto-Trading to execute this strategy automatically, 24/7.
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