Vortex Indicator (VI)

Two crossing lines that traders read to gauge whether upward or downward movement has been more dominant recently.

What it is

The Vortex Indicator (VI) is a trend tool made of two oscillating lines: VI+ (positive) and VI- (negative). It was introduced by Etienne Botes and Douglas Siepman in the January 2010 issue of Technical Analysis of Stocks & Commodities magazine. The two lines measure the strength of upward versus downward price movement over a chosen lookback period (commonly 14 bars). Traders typically use it to study the relationship between the two lines rather than to predict price. It is educational in nature and nothing about it is predictive; all trading carries risk of loss.

How it works

The indicator is built from price relationships between consecutive bars. First, "vortex movement" is measured two ways: positive vortex movement (VM+) is the absolute distance from the current high to the previous low, and negative vortex movement (VM-) is the absolute distance from the current low to the previous high. Each of these is summed over the lookback period (e.g., 14 bars). The two sums are then each divided by the summed True Range over the same period to normalize them. This produces VI+ and VI-, two positive-valued lines that typically oscillate around 1.0. VI+ rising above VI- reflects a period where upward movement has been larger relative to range; VI- above VI+ reflects the opposite. The lines are descriptive of recent movement and are not forecasts.

How traders read it

• Traders often read VI+ above VI- as a period where upward movement has been dominant, and VI- above VI+ as a period where downward movement has been dominant.
• Crossovers between the two lines are commonly watched as the moment the balance between up and down movement shifts; some traders treat these as points to study further rather than act on automatically.
• A wide gap between the lines is often interpreted as stronger directional movement, while lines close together or repeatedly crossing are read as choppy or rangebound conditions.
• Both lines generally oscillate around 1.0; values stretched far from that level are sometimes read as unusually strong recent movement that may not persist.
• Many traders combine VI with other context (price structure, volume, higher timeframes) because crossovers can occur frequently and none of them are predictive.

Common settings

Default length is 14 bars, as in the original 2010 article. Shorter lengths (e.g., 7-10) make the lines more reactive and noisier; longer lengths (e.g., 21-30) smooth them and delay crossovers. The indicator works on any timeframe.

Strengths

• Plain construction from highs, lows, and True Range, so its behavior is easy to understand and reproduce.
• Two-line design makes the up-versus-down balance and its shifts visually clear.
• Normalized around 1.0 in a consistent way, which makes it readable across different instruments and timeframes.

Pitfalls to watch

• In sideways or choppy markets the two lines cross back and forth repeatedly, producing many crossovers that do not lead anywhere; this is a common source of confusion.
• Like most indicators built on past bars, VI is lagging — it describes movement that has already happened and does not forecast what comes next.
• A shorter lookback makes the lines more reactive and noisier; a longer lookback smooths them but delays crossovers. There is no universally correct setting.
• Crossovers are not buy or sell signals on their own. Treating every cross as a reason to act, without wider context, ignores that nothing here is predictive and trading carries risk of loss.
• VI can give a misleading impression of strength during low-liquidity periods or around gaps, where True Range and vortex movements can spike.

Pine v6 example

//@version=6
indicator("Vortex Indicator", overlay=false)

length = input.int(14, "Length", minval=1)

// Vortex movements
vmPlus  = math.abs(high - low[1])
vmMinus = math.abs(low - high[1])

// Summed true range and vortex movements over the period
sumTR    = math.sum(ta.tr(true), length)
sumVMPos = math.sum(vmPlus, length)
sumVMNeg = math.sum(vmMinus, length)

viPlus  = sumVMPos / sumTR
viMinus = sumVMNeg / sumTR

plot(viPlus,  "VI+", color = color.teal)
plot(viMinus, "VI-", color = color.red)

// Educational tool only. Not a signal or advice; trading carries risk of loss.

Pro tip: Because crossovers happen often in rangebound conditions, many traders look at the width and persistence of the gap between VI+ and VI- rather than reacting to every single cross. This is an observation about how the tool is commonly read, not a recommendation to trade.

Educational only — not financial advice, not a recommendation to trade. No indicator is predictive; trading involves substantial risk of loss.