Vortex Indicator

Trend

What it measures

The Vortex Indicator consists of two lines (VI+ and VI-) that capture the idea of upward and downward movement using the range of current bars relative to the prior period's extremes. When VI+ crosses above VI-, it signals an uptrend; when VI- crosses above VI+, it signals a downtrend. It's inspired by the spiral patterns of natural vortices.

How readings are interpreted

VI+ above VI- indicates bullish momentum is dominant. VI- above VI+ indicates bearish momentum. The crossover points are the primary signals. The magnitude of separation between the lines indicates trend strength. Divergence (price trend vs VI trend) can warn of reversals.

Conventional levels

VI+ crosses above VI-: bullish trend signal — buy
VI- crosses above VI+: bearish trend signal — sell/short
VI+ and VI- close together: trend uncertainty, both lines oscillating
Large separation between VI+ and VI-: strong trend in progress
Both lines declining: low momentum market

Where it works, and where it does not

Most reliable in directional markets with sustained trends. In choppy markets the lines cross frequently producing false signals. Works on all timeframes but best on daily for swing trading.

Commonly read alongside

ADX: Vortex crossover + ADX > 20 = confirmed trend
EMA: Vortex bullish signal + price above 50 EMA = strong long setup
RSI: Use RSI to time entries after a Vortex crossover in the right direction

Known limitations

In ranging markets, Vortex generates frequent false crossovers
Less widely used than ADX/MACD — signals have less 'market weight'
On very short timeframes it's highly sensitive to random noise

In practice

Commonly used as a trend-direction filter, read in the direction of the dominant VI line
Combine with price pattern: Vortex bullish + bullish engulfing candle = strong entry
The initial crossover is the best entry; waiting for confirmation often means missing most of the move
Monthly Vortex signal is very reliable for identifying major market regime changes

Plot it yourself. Add this indicator to a chart, change every parameter and watch the line move, then backtest how the rule would have behaved on historical data — free on the S&P 500 ETF, no card.

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This is reference material, not advice. It describes what each indicator measures and how its readings are conventionally interpreted. Nothing here is a recommendation to buy or sell anything, and no indicator predicts future prices. GU Analyser is an analytical tool — no money is ever traded here.