ForexAI Academy
Indicator Academy

Vortex Indicator

VI · module 11 of 33 · trend

Upward and downward pressure by comparing candle-to-candle range extensions against true range.

Vortex Indicator on a chart
EUR/USD · 1h · demo data
VI− over VI+VI+ over VI−VI+ over VI−VI+ over VI−1.09051.0791Vortex (14)1.0
  • VI+
  • VI−
  • ▲/▼ where the rule triggers

When VI+ crosses above VI− upward movement is dominating; the reverse marks downward control.

How to apply it

  1. 1. Add it. Start with 14 on 15m (Intraday).
  2. 2. Read the market first. VI+ above VI− and both diverging from 1.0 confirms directional pressure.
  3. 3. Adjust for ranges. Both lines hover near 1.0 and cross repeatedly — a clear stand-aside reading.
  4. 4. Manage the trade. Place the stop at 1.5 × ATR and the target at 3.5 × ATR, and only act when the chart above shows the trigger.

How it is calculated

VM+ = |High − Lowprev|, VM− = |Low − Highprev|; VI+ = Σ VM+ ÷ Σ TR, VI− = Σ VM− ÷ Σ TR over n.

Inputs

  • · Period (14 or 21)

Reading it correctly

In a trend

VI+ above VI− and both diverging from 1.0 confirms directional pressure.

In a range

Both lines hover near 1.0 and cross repeatedly — a clear stand-aside reading.

Settings by style

StyleSuggested values
Intraday14 on 15m
Swing21 on 4h

These are conventional starting points, not optimised values. Test any change on your own pair and timeframe before relying on it.

Worked example

Over 14 candles, Σ VM+ = 0.0182, Σ VM− = 0.0110, Σ TR = 0.0160. VI+ = 1.14, VI− = 0.69. Upward extensions are outpacing downward ones by a wide margin — a directional regime.

When it failed

In a quiet USD/CAD session, VI+ and VI− both sat between 0.95 and 1.05 and crossed five times. Traders treating every cross as a regime change took five losses inside a 20-pip range.

Limitations

  • Very similar information to DMI/ADX — running both is redundancy, not confirmation.
  • Crosses near 1.0 are noise.
  • Gaps inflate VM values and distort readings.

Works well alongside

  • · ATR
  • · Market structure

Redundant with

  • · DMI / ADX
  • · Aroon

Stacking these produces agreement by construction, which is not confirmation.

Practice exercise

Plot VI(14) and DMI(14) on the same chart and count how often their directional readings disagree over 200 candles.

Check your understanding

1. Both Vortex lines near 1.0 suggests:
  • · A strong trend
  • ✓ No clear directional pressure
  • · High volume
  • · Overbought conditions

Values near 1.0 mean up and down extensions are balanced relative to true range — a range condition.

2. Vortex is largely redundant with:
  • · ATR
  • ✓ DMI / ADX
  • · Bollinger Bands
  • · VWAP

Both derive directional pressure from range extensions normalised by true range.