In this article we present a version of the Vortex technical indicator developed for the Metatrader 4 trading platform, which can be downloaded and used at no cost. This indicator, although not as well known as other technical analysis tools such as MACD or RSI, can be a useful tool, especially if it is combined with other indicators. In fact, there are different trading systems that incorporate the Vortex and that we will describe later. For now, we will focus on providing a short introduction about this indicator and its trading signals and then we will talk specifically about the Vortex indicator for MT4 and its main features.
What is the Vortex indicator?
The Vortex indicator was developed by Etienne Botes and Douglas Siepman. It consists of two oscillators that measure the upward and downward movement of the market. It is a technical analysis tool that is inspired by the natural flow and water vortex that occurs in rivers.
«The Vortex indicator (VTX) can be used to identify the beginning of a trend and subsequently confirm the direction of the trend. First, a simple crossing of the two oscillators can be used to signal the beginning of a trend. After this crossing, the trend is said to be bullish when + VI is above -VI and bearish when – VI is greater than + VI. Second, a crossing above or below a particular level can signal the beginning of a trend and these levels can be used to affirm the direction of the trend. »
Vortex trading signals
- Buy signal: The typical bullish signal of the Vortex is when the +VI crosses the -VI from the bottom up.
- Sale signal: The typical bearish signal of the Vortex is when the -VI crosses the +VI from top to bottom.
As with all technical indicators, the use of Vortex is not recommended as the sole criterion for opening and closing new positions. The most advisable is to use the Vortex in conjunction with other tools as part of a developed trading system.
- Markets in which Vortex can be used: In all markets, for example Forex, indices, precious metals, etc.
- Time frames: This indicator can be used in any time frame.
Vortex indicator for MT4
The modified indicator presented below for download shows the Vortex indicator in a window below the main price chart. This indicator calculates the Vortex using the principles and formulas developed by Etienne Botes and Douglas Siepman, therefore it is the regular indicator without any modification.
As we see in the previous image, the indicator draws the line of + VI (green color) that represents the upward trend as the line of -VI (red color) that represents the downtrend.
In this case, the user can change the color of the lines, the period of the indicator (the default is 14) and add lines that can be used as levels to generate market entry and exit signals.
As we indicated earlier, when + VI is above -VI the trend is bullish and when -VI is above + VI, the trend is bearish. The periods in which the + VI and -VI move in range indicate periods of the market in which the price is consolidating, moving laterally.
Download and installation of the custom Vortex indicator for MT4
You can download this indicator at no cost at the following link: