The Vortex Indicator – A Simple Trend Tool

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    The Best Binary Options Broker 2020!
    Perfect For Beginners!
    Free Demo Account!
    Free Trading Education!

  • Binomo
    Binomo

    Good choice for experienced traders!

Получай сигналы с Vortex Indicator. Метелица-индикатор

Главная страница » Технические индикаторы » Получай сигналы с Vortex Indicator. Метелица-индикатор

Привет, ребята! Индикатор в первую очередь должен генерировать самые точные торговые сигналы и давать трейдеру уверенность в надежности всех операций. Сигналы должны поступать с минимальным запозданием, а чувствительность индикатора эффективной. Разработка Д. Зипмана и Э. Ботеса – Vortex Indicator направлена как раз на это. Vortex индикатор скачать.

p, blockquote 1,0,0,0,0 –>

ADX-ADX

Сигналы ADX индикатора показывают максимально точно волатильность или определяют тренд. В то время, как алгоритмы расчетов направленного движения основаны на четкой взаимосвязи между рыночными тенденциями и динамикой цен.

Такой подход делает позитивным (негативным) значением индикатора ADX часть ценового бара, которая расположена выше верхней High-цены (ниже нижней Low-цены) бара до него. Если текущий бар находится внутри предыдущего, то минимальное значение принимается за нулевой уровень. Чтобы идентифицировать силу текущего направления динамики рынка по восходящему или нисходящему направлению, применяется вторая величина. Если по отношению к предыдущему бару Low-цена внутреннего текущего бара расположена выше, а его High-цена – ниже, тогда обоим направлениям динамики рынка присваивается нулевой уровень силы.

Расчеты индикатора направленного движения, в классическом виде, показаны в форме двух столбцов. Один столбец обозначает силу восходящей. Второй столбец – нисходящую динамики рынка и её силу. Можно добиться более точного определения тренда, если дополнительно провести скользящее постолбцовое суммирование членов некоторых строк, следующих друг за другом. В стандартном индикаторе число таких строк составляет 12, 21 или же 55. Из нулей, в результате, выстраиваются две последовательности отрицательных или положительных чисел. В графическом построении из этих цифр выстраиваются две кривые. Если рыночная тенденция меняется они пересекаются. При более выраженном тренде кривые расходятся. И тренд становится сильнее, чем больше расхождение.

p, blockquote 5,0,1,0,0 –>

Как работает Vortex Indicator

Алгоритм индикатора производит обработку последовательных цен, что позволяет обнаруживать неявные закономерности динамики цен. Такие данные помогают трейдеру принимать определенные торговые решения в рыночной стратегии.

Первым этапом является расчет силы нисходящего и восходящего тренда. Необходимо вычислить разницу настоящего минимума и предыдущего максимума – это сила нисходящего тренда, и текущего максимума и предыдущего минимума – это сила восходящего тренда.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    The Best Binary Options Broker 2020!
    Perfect For Beginners!
    Free Demo Account!
    Free Trading Education!

  • Binomo
    Binomo

    Good choice for experienced traders!

Вторым этапом полученные данные складываются с периодом, который задан в настройках индикатора. При этом отдельно суммируются значения для нисходящего и восходящего тренда.

Третьим этапом вычисляется среднеистинный диапазон динамики рынка, оценивающий количественно волатильность котировки. Расчет проводится, используя:

p, blockquote 9,0,0,0,0 –>

  • минимум текущей свечи;
  • максимум текущей свечи;
  • Close-цену предыдущей свечи.

Четвертым этапом числовые последовательности из второго этапа надо поделить на значение истинного диапазона.

Именно так Vortex Indicator показывает силу тренда, опираясь на рыночную волатильность . График выстраивает вычисленные последовательности чисел в кривые, которые колеблются вокруг уровня равного 1.

p, blockquote 11,0,0,0,0 –>

Как понимать сигналы Vortex Indicator

Основные сигналы представляют собой кривые относительно уровня равного 1 или друг друга:

p, blockquote 12,0,0,0,0 –>

  • когда зеленая кривая силы восходящего тренда находится над красной кривой силы нисходящего тренда – это означает, что тенденция роста котировок сформировалась;
  • когда над кривой силы восходящего тренда расположена кривая силы нисходящего тренда – тенденция падения котировок сформировлась;
  • если кривая отошла от уровня номер 1 далеко, то тренд может развернуться.

Когда эти кривые пересекаются – это становится сигналом. Когда кривая восходящего тренда пересекает кривую нисходящего тренда снизу-вверх (сверху-вниз), значит открывается длинная (короткая) позиция, а короткая (длинная) позиция закрывается.

Торговая система № 2 — ADX+MA.

p, blockquote 14,0,0,0,0 –>

С чего начать использовать Vortex Indicator

Индикатор Vortex необходимо скачивать и устанавливать отдельно, т.к. он не входит в пакет MetaTrader.

Скачайте данный файл и разместите его в папке /MQL/Indikators.

Первоочередная задача money management для начинающих трейдеров.

Также нужно понимать, что у индикатора только одна настройка. Она не должна быть меньше 14 . Иначе индикатор будет ходить очень близко к уровню 1. Также нужно понимать, что увеличение значения приводит к сглаживанию индикатора. Он уже не будет таким чувствительным.

По этому вопросу у меня все. До новых заметок.

p, blockquote 19,0,0,0,0 –> p, blockquote

(2 оценок, среднее: 5,00 из 5)

Understand Vortex Indicator Trading Strategies

Swiss market technicians Etienne Botes and Douglas Siepman introduced the vortex indicator in the January 2020 issue of the magazine Technical Analysis of Stocks and Commodities. Since then, the technical indicator has gained traction as a reliable trend following indicator that can produce surprisingly accurate buy and sell signals. However, it may still take a few more years of market testing and experience to fully evaluate the vortex indicator’s potential.

What is the Vortex Indicator?

The vortex indicator plots two oscillating lines: one to identify positive trend movement and the other to identify negative price movement. Crosses between the lines trigger buy and sell signals that are designed to capture the most dynamic trending action, higher or lower. There’s no neutral setting for the indicator, which will always generate a bullish or bearish bias. You can find the complete vortex indicator calculations here.

Indicator construction revolves around the highs and lows of the last two days or periods. The distance from the current high to the prior low designates positive trend movement, while the distance between the current low and the prior high designates negative trend movement. Strongly positive or negative trend movements will show a longer length between the two numbers, while weaker positive or negative trend movement will show a shorter length.

Readings are usually captured over 14 periods (though the technician can choose any length) and then adjusted using J. Welles Wilder’s true range. Results are posted as continuous lines beneath price bars, while crossovers are compared to other trend-following indicators to produce valid trading signals. Traders can use the vortex indicator as a standalone signal generator, but keep in mind that it is vulnerable to significant whipsaws and false signals in congested or mixed markets.

Synergy With Other Indicators

Adjusting the vortex indicator to longer periods will lower the frequency of whipsaws but generate delayed positive or negative crossovers. On the other hand, shortening the length will elicit many crossovers that fail to generate significant trend movement. As a general rule, high beta securities will respond better to shorter-term settings, while slow-moving securities respond better to longer-term settings.

You can improve indicator reliability by comparing vortex indicator signals with other trend-following tools. The underlying math shows many similarities with Wilder’s average directional index (ADX), the negative directional indicator (-DI) and the positive directional indicator (+DI). Those calculations translate into three lines that trigger complex crossovers. Unlike the vortex indicator, Wilder’s system can issue neutral readings that tell traders to stand pat or avoid exposure.

Moving average convergence divergence (MACD) analysis offers a perfect fit with the vortex indicator. Its construction with three moving averages lowers false readings triggered by multiple indicators that capture the same flawed data. When plotted with histograms, the indicator generates surprisingly few false signals, making it a perfect partner for the noisier and whipsaw-prone vortex indicator.

Synergistic trading strategies use a simple process that looks for sympathetic buy or sell signals in the vortex indicators as well as in other indicators before committing capital. The challenge comes in two forms: First, there need to be significant differences in data sources to avoid replicating flawed information, and second, indicator periods need experimentation and fine-tuning to focus on the intended holding period, whether short, intermediate or long term.

This last step of honing indicator periods is vital because trends exhibit time frame independence, allowing multiple uptrends and downtrends to evolve in different time segments on the same security. This fractal behavior will produce false readings if the vortex indicator is looking at one segment of trend activity while a second indicator looks at a second segment. Traders can overcome this flaw through trial and error, by watching how indicator pairs interact on various instruments and in various time frames. With MACD in particular, it’s often best to leave settings alone and tweak vortex indicator periods instead.

A Vortex Indicator Trading Strategy

In the 2020 article that introduced the vortex indicator, authors Botes and Siepman described a vortex indicator trading strategy designed to filter out and limit false signals. The extreme high or low on the day of the bullish or bearish crossover becomes the intended entry price, long or short. Those levels might not be hit on the day of the signal, prompting a good-until-canceled buy or sell order that remains in place for multiple sessions, if required.

If positioned at the time of the crossover, the extreme high or low becomes the stop and reverse action level. In this strategy, a short sale will be covered and reversed to the long side when the price returns to the extreme high following a positive crossover, while a long position will be sold and reversed into a short sale after price returns to the extreme low following a negative crossover.

They also recommend combining these entry filters with other risk management techniques, including trailing and profit protection stops. These protective measures lower the incidence of false signals while maximizing profit on the underlying trend, even when it fails to gather significant momentum. However, this approach fails to deal with period length, which will trigger waves of false signals until adjusted to the predetermined holding period and then thoroughly backtested.

Example 1: Microsoft

Let’s use historical data from Microsoft Corporation (MSFT) to test the vortex indicator. As you can see in the graph below, Microsoft shares eased into a narrow range in March 2020. This encouraged traders to watch for a profitable breakout. Following the vortex indicator, there is a buy signal on March 14, but the price closes well below the extreme intraday high at $38.13 per share. The trader sets a good-until-canceled buy order that will execute when the security returns to that trigger price.

On March 17, the security returns with perfect timing, crossing over the breakout and lifting into the lower $40s. The indicator crosses over to the sell side on April 10, allowing a profitable exit that misses a big chunk of upside.

MACD and a trailing stop assist trade management and suggest executing a long position one day later than the vortex indicator buy signal. They also issued a sell signal four days earlier, supporting a more profitable exit. Meanwhile, a trailing stop placed at the March 31 breakout line near $41 per share would have triggered when the security sold off on April 4, capturing an even greater share of the four-point uptrend.

Vortex Indicator and Price Patterns

The vortex indicator also works well when paired with classic price pattern analysis in recognizing legitimate trends while filtering out whipsaws and other range-bound mechanics. Theoretically, this combination should generate the most reliable buy and sell signals at two inflection points:

  1. When a well-developed trading range is set to break out or break down.
  2. When a trending market loses momentum or reaches a significant barrier that favors the transition into a new trading range.

The catalog of well-known range-bound patterns, including flags, rectangles, and triangles, benefits this approach because natural breakout and breakdown levels have been fully deconstructed, allowing the trader to focus on the vortex indicator at the same time that price tests support or resistance. Trend strength and durability can be further measured for cycle convergence using stochastics set at 5,3,3 or another relative strength indicator.

Example 2: American Airlines

American Airlines Group Inc. (AAL) carves out a classic double top pattern between December 2020 and May 2020 and then breaks down in a significant downtrend. The vortex indicator issues a sell short signal eight sessions before the technical breakdown, encouraging early short sales within the trading range. The crossover also works well as a secondary indicator for pattern traders looking to stack the odds in their favor. A vortex indicator cover short signal arrives six weeks later, setting up a profitable exit near $40 per share.

The Bottom Line

The vortex indicator relies heavily on the earlier work of J. Welles Wilder, the creator of several important technical indicators. The vortex indicator builds a signaling mechanism for new and accelerating uptrends and downtrends. As with Wilder’s indicators, the vortex indicator works best when combined with other trend-following systems and classic price pattern analysis.

Vortex Indicator

Vortex indicator is a comparatively new technical instrument designed by two Swiss traders E. Botes and D. Siepman in 2020. The indicator combines features of two classes of technical tools as it has two oscillating lines with a partial role of a momentum indicator. The most efficient trading strategy is the trend-following method in binary options based on different timeframes.

What is a Vortex indicator?

Like any other oscillator, the Vortex indicator (VI) is placed in a separate window below the price chart. It has two oscillating lines that reflect different trend momentum. The blue line (VI+) shows positive momentum of the price change. The red line (VI-) reacts to the shift of negative momentum. When the blue line is above the red one, the Vortex indicator points to the general bullish trend, while the opposite displacement of the lines indicates the overall market demand for put options for the asset. Another powerful feature of the vortex indicator is that it shows moments when the momentum is getting stronger by spreading the distance between lines. Crossovers show reversal points when the previous trend is getting exhausted and the price action is about to reverse. These additional technical signs make the Vortex indicator different from most of the oscillators, giving it a feature of well-known and powerful momentum indicators such as MACD and ADX.

This is how the Vortex indicator looks like:

Mathematical background

The basic measurement of both positive and negative lines is based on comparing recent peaks and bottoms in the last two bars in the chosen period. The bullish blue line measures the distance between the current high and prior low rate, plotting the result within the length of the indicator (period) and adjusting with a true range (TR). The negative trend momentum is shown by the red line, which compares the current low with the prior high, making the same operation with the difference. Thus, the Vortex meaning reflects a short-term change in the price, while the distance between the two lines shows how volatile was the recent price action.

On top of reflecting the level of the current volatility in the market, the Vortex instrument points to the direction of the price change as comparing distances between the recent peaks and bottoms gives a mathematical reflection of the trend. If the positive surplus is constantly higher than the negative one, then call options are in demand and the trend is likely to continue in the same direction. The same conclusion is fair about a trend that shows a growing negative surplus between two lines as in this case, the market players are keen on buying Put options.

How to Calculate the Vortex Indicator?

There are several steps of calculations used in the Vortex lines formula.

True Range (TR) reflects the greatest value among:

  • Current high minus current low;
  • Current high minus previous close;
  • Current low minus previous close.

Uptrend and downtrend movement is:

  • VM+ = | current high – prior low;
  • VM- = | current low – prior high.

Uptrend and downtrend movement is:

  • VM+ = | current high – prior low;
  • VM- = | current low – prior high.

Trendlines VI+ and VI- are calculated as follows:

  • VI+ = SUM VMn+ / SUM TRn;
  • VI- = SUM VMn- / SUM TRn.

Best settings for Vortex indicator

The only parameter traders can adjust in the Vortex indicator is length or period. The default period is 14 bars (days or hours depending on the chosen timeframe). Binary options traders can change the length to get the maximum efficiency of the indicator depending on market conditions.

During a choppy price action when traders show indecisiveness in terms of the trend direction, the price chart is full of ups and downs in a tight sideways range. Thus, the Vortex indicator reflects those shifts by charting many crossovers as peaks and bottoms follow each other consequently. Therefore, the number of false trading signals is getting higher. In order to increase the accuracy of signals to buy a call or Put options, traders should enlarge the period. Best settings for Vortex indicator, in this case, are in the range of 14/34 bars with the middle value of 21 periods. The wider length of the formula allows smoothing changes of the price, lowering the sensitivity of the indicator and increasing the accuracy of trading signals.

During strong trends, crossovers happen not so often as the price action goes in one direction for most of the time. So the surplus between positive and negative trend momentum is getting wider, reflecting the low number of shifts in the technical sentiment. Therefore, traders should consider tightening the length of the Vortex indicator to get more trading signals that point to short-term corrections. This step would increase the overall profitability of a trading system based on Vortex indicator, helping traders to minimise losing deals. Best periods for trendy markets and short-term timeframes are in the range of 8/14 bars.

If you like Vortex trading strategy, you might also be interested in this Option Sniper Strategy

Vortex indicator strategy

Vortex strategy is based on following trends. As far as trading binary options suggests trading cycles when the price action goes in the same direction for quite a while, the sensitivity and accuracy of trading signals provided by Vortex indicator can help traders to maximise potential profits.

For example, when a crossover happens and both lines start spreading the surplus between them, a strong trend is born, signalling the beginning of a trading cycle. Once the spread starts narrowing, the Vortex tool could signal that the momentum of the previous trend is getting exhausted, and the likelihood of a retracement is getting higher. It would be better to stop the trading cycle and monitor the price action when VI+ and VI- lines are getting closer to each other. And if they do not perform the crossover, bouncing off each other, then it’s time to resume the trading cycle of buying options in the previous direction.

Otherwise, if the crossover occurred, then traders would consider buying options in the opposite direction as the indicator points to the reversal of the market momentum. Multiple crossovers signal the market’s indecisiveness when the trend’s direction is unclear. Although the Vortex indicator is a standalone technical tool, reflecting the technical sentiment, it can be used together with additional technical instruments to increase the overall efficiency of a trading system. For instance, it is possible to combine a short-length Vortex tool with a slow and less sensitive trend indicator such as MACD or Ichimoku cloud.

How to use the Vortex indicator?

Examples of profitable trades using the Vortex pattern

The hourly chart of the USD/JPY currency pair below shows that the Vortex indicator signalled the beginning of a trading cycle to buy put options (left red arrow) after VI+ and VI- lines crossed each other. When the largest distance between the two lines was reached, the cycle was interrupted and a binary options trader took a wait-and-see position. There was a bullish signal, but it was short-lived as the upside swing did not last long. After the second bearish crossover (right red arrow), the trading cycle of buying put options was resumed and the exchange rate was declining for 12 hours in a row. The local bottom of the price change was reflected by the Vortex indicator, which had the maximum spread between its lines, so the trading cycle was stopped. After that, the currency pair entered a sideways consolidation range with directionless price action, which was reflected in the indicator’s window as there were multiple crossovers.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    The Best Binary Options Broker 2020!
    Perfect For Beginners!
    Free Demo Account!
    Free Trading Education!

  • Binomo
    Binomo

    Good choice for experienced traders!

Like this post? Please share to your friends:
How To Make Money on Binary Options Trading
Leave a Reply

;-) :| :x :twisted: :smile: :shock: :sad: :roll: :razz: :oops: :o :mrgreen: :lol: :idea: :grin: :evil: :cry: :cool: :arrow: :???: :?: :!: