Understanding the Vortex indicator
The Vortex indicator is a very recent tool relative to other technical indicators, having only been designed in 2010. A trader’s must-have, it is both simple and powerful.
It is made up of 2 curves: VI+, which represents the bullish strength of the market (taking volatility into account), and VI-, which is identical, but measures the bearish strength of the market.
Vortex block configuration
On BullTrading, you can configure each block to make it unique. In this block, you can define the time unit, the period used, …
Time Unit
As Bulltrading is able to create a multi-frame strategy, you have the option of choosing the time period over which to calculate this indicator. You therefore have two options:
- Default: if you leave Default, the time unit will vary according to the time horizon you use in the backtest.
- 15m,30m,1d… : If you choose a specific time unit in the time unit, this means that you will choose this specific time unit whatever time unit you use to backtest your strategy.
TIP: If you’re a beginner, I advise you to leave the default time unit.
Period Vortex
The Vortex indicator is created by taking into account the previous low and high prices, so we need to specify the period in number of candles over which we’re going to calculate the indicator
Signal Type
This parameter has only two possibilities: CrossOver and Position. Let’s explain the difference this parameter makes:
- CrossOver: if you choose CrossOver for the signal type, this block will be validated only when the VI+ line passes below or above the VI- line.
- Position: with this option, the block will be validated as long as you are in the chosen trigger type (Bearish or Bullish).
TIPS: the CrossOver parameter is much more restrictive, so it’s worth using it when you only have one or two indicators combined. However, if you have too many blocks combined with the Crossover parameter, this will greatly reduce the number of trades in your strategy, as we need, for example, a crossover between the two MAs + a crossover between the RSI 70 threshold + a crossover in the Vortex indicator…
So, when combining several indicator blocks, don’t set more than 1 or 2 blocks with the CrossOvers parameter if you’re a beginner.
Trigger Type
This parameter has only two possibilities: Bullish or Bearish. Let’s explain the difference:
- Bullish: if you set the trigger type to bullish, the block is validated if the VI+ line is above the VI- line.
- Bearish: if you define the trigger type as Bearish, the block is validated if the VI+ line is below the VI- line.
