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The Vortex Indicator was inspired by the work of an Austrian inventor, Viktor Schauberger, who studied the flow of water in rivers and turbines. Etienne Botes and Douglas Siepman developed the idea that movements and flows within financial markets are similar to the vortex motions found in water. The Vortex Indicator was also partly inspired by J. Welles Wilder’s concept of directional movement, which assumes the relationship between price bars gives clues as to the direction of a market.
This indicator could be used in different ways, but the main important one are:
- Mean reverting mode: when the distance between the red and green line reduces, this could be a good indication that the price is going to return towards his average line
- Trending mode: when red and green line crosses, this could be an indication that a new trend is going to start.
Indicators Parameters
- Vortex Period: represent the main period of the indicator.
- Alarm Presence: it sets the alarm on the platform when the two lines crosses each other.
- Notification Presence: it send a notification when the two lines crosses each other.
