Vortex Indicator: Comparing Positive and Negative Trend Movement

Summary

The Vortex indicator uses two oscillators to represent positive and negative price movement, in a way similar to the directional lines in the Average Directional Movement Index. It calculates positive movement from the distance between the current high and previous low, and negative movement from the current low and previous high. Each measure is averaged and normalized by an average true range measure over a configurable period.

The document gives the formulas and identifies the calculation period as the indicator’s sole input. It does not provide trading rules, performance evidence, or guidance on interpreting oscillator crossovers, so it describes an indicator calculation rather than a tested strategy. The output may help compare directional movement, but the document alone does not establish its reliability or how it should be combined with other signals.

Key ideas

• The Vortex indicator consists of positive and negative movement oscillators.
• Positive movement uses the current high relative to the previous low.
• Negative movement uses the current low relative to the previous high.
• Both movement measures are averaged and scaled by average true range over the selected period.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.