Vortex Indicator Crossovers with Directional Smoothing Filters

Summary

This strategy uses the Vortex Indicator’s positive and negative lines to generate directional signals. Each line is built from summed price movements across a 14-bar period, normalized by summed true range. The source then smooths the lines and looks for crossovers: a positive-line crossover can trigger a long entry, while a negative-line crossover can trigger a short entry. Changes in the lines’ direction further divide signals into cases, such as a long crossover while the negative line is falling.

The document explains the indicator and signal logic, but provides no performance results or evidence that the filters improve outcomes. Its prose describes simple moving average smoothing, while the source uses weighted and recursive smoothing, so the implementation details do not fully match the explanation. The listed backtest settings specify BTC/USDT futures on hourly bars over January 2024, but no backtest results are reported. The document notes misleading signals and trading costs as risks, and suggests tuning periods, adding stop losses, and improving exits. The rules therefore need careful verification and testing before practical use.

Key ideas

• The Vortex positive and negative lines compare current highs and lows with the previous bar’s opposite extreme.
• The indicator lines are normalized by summed true range over the selected period.
• Crossovers in the smoothed lines provide the basic long and short signals.
• The source adds directional filters based on whether the indicator lines are rising or falling.
• The document supplies backtest settings but no performance results, and its smoothing description differs from the source implementation.

Tags

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