Vortex Indicator: Spotting Trend Starts With VI+ and VI- Crossovers

Most trend tools ask one question: is price going up or down? The vortex indicator asks two, and keeps the answers separate. One line tracks how hard the bulls are pushing, another tracks how hard the bears are pushing, and the interesting moments come when those two lines swap places. If you have ever looked at a stock like it was clearly turning but couldn’t put a number on it, this is one of the cleaner ways to do that.

In this guide we’ll cover where the indicator comes from, how VI+ and VI- are calculated (with a full worked example you can redo in a spreadsheet), how to read crossovers and the 0.90 and 1.10 thresholds, and the habits that keep it from leading you into choppy-market whipsaws on NSE charts.

Where the vortex indicator came from

The indicator was developed by Etienne Botes and Douglas Siepman, who introduced it in a 2009 edition of Technical Analysis of Stocks & Commodities, according to Investopedia’s vortex indicator explainer. StockCharts’ ChartSchool page on the indicator adds that the pair drew on the work of Welles Wilder, who created the True Range measure the indicator uses, and of Viktor Schauberger, whom ChartSchool describes as the father of implosion technology.

The output is two lines, usually drawn in contrasting colours in a panel below the price chart:

• VI+ (sometimes written +VI) measures positive trend movement.
• VI- (or -VI) measures negative trend movement.

Whichever line sits on top tells you which side currently has the upper hand. That is really the whole idea. The rest is detail on how the lines are built and how to avoid reading too much into every wiggle.

How VI+ and VI- are calculated

The formula looks heavier than it is. Both Investopedia and ChartSchool describe the same building blocks, and there are only three of them.

1. Vortex movement (VM+ and VM-)

For each bar, compare today’s extremes with yesterday’s opposite extremes:

• VM+ = the absolute value of today’s high minus yesterday’s low.
• VM- = the absolute value of today’s low minus yesterday’s high.

Think about what that means on a chart. If a stock makes a high far above yesterday’s low, buyers have stretched the range upward, so VM+ is large. If today’s low drops far below yesterday’s high, sellers have stretched it downward, so VM- is large. ChartSchool puts it simply: the further the current high is from the prior low, the more positive the trend movement, and the further the current low is from the prior high, the more negative it is.

2. True Range (TR)

True Range is Wilder’s measure of how much a stock really moved in a session, including any gap from the previous close. It is the largest of three numbers:

• today’s high minus today’s low,
• today’s high minus yesterday’s close (absolute value),
• today’s low minus yesterday’s close (absolute value).

If you already use ATR for stop-losses, this is the same raw ingredient.

3. Sum and divide

Pick a lookback period, n. Add up the last n values of VM+, VM- and TR. Then:

• VI+ = sum of VM+ over n periods ÷ sum of TR over n periods
• VI- = sum of VM- over n periods ÷ sum of TR over n periods

Dividing by True Range is what makes the indicator useful across very different stocks. ChartSchool describes the result as volatility-adjusted positive and negative trend movement, which is why both lines oscillate above and below 1 whether you are looking at a ₹50 PSU stock or a ₹5,000 private bank. ChartSchool’s standard setting is 14 periods, and Investopedia says the parameter typically runs between 14 and 30 days.

The vortex indicator doesn’t tell you whether price went up. It tells you which side stretched the range further, after allowing for how jumpy the stock already is.

Vortex indicator worked example

Let’s run the numbers on a made-up stock so every step is visible. The prices below are invented purely for illustration, and we’ll use a 5-day lookback instead of 14 so the table stays short. The method is identical with a longer period; you just add more rows.

Take Day 1 to see how each cell is filled. High minus low is 504 − 494 = 10. High minus the previous close is 504 − 496 = 8. Low minus the previous close is 494 − 496, or 2 in absolute terms. The largest is 10, so TR = 10. VM+ is 504 − 490 (Day 0’s low) = 14. VM- is 494 − 500 (Day 0’s high), which is 6 in absolute terms.

Day 6 shows why True Range matters. The day’s own range is 511 − 496 = 15, but the low of 496 is 17 below the previous close of 513. So TR is 17, not 15. A plain high-minus-low would have understated how violent that session was.

Reading the first window (Days 1 to 5)

Sum of TR = 10 + 9 + 9 + 10 + 15 = 53. Sum of VM+ = 14 + 15 + 12 + 5 + 17 = 63. Sum of VM- = 6 + 4 + 6 + 14 + 7 = 37.

• VI+ = 63 ÷ 53 = 1.189
• VI- = 37 ÷ 53 = 0.698

VI+ is comfortably on top. Even with the dip on Day 4, the buyers stretched the range upward far more than sellers stretched it downward. That is what an uptrend looks like on this indicator.

Rolling forward

Now drop Day 1 and add Day 6 (window Days 2 to 6): TR sums to 60, VM+ to 59 and VM- to 50. VI+ falls to 0.983 and VI- rises to 0.833. The lines are converging. Nothing has crossed yet, but the gap has shrunk from about 0.49 to 0.15.

Roll once more (window Days 3 to 7): TR = 64, VM+ = 50, VM- = 68. VI+ = 0.781 and VI- = 1.062. VI- is now above VI+. That is a bearish crossover.

Here is the part people skip. Under the stricter threshold reading we’ll cover next, this crossover is only half-confirmed: VI+ has dropped below 0.90, but VI- at 1.062 has not yet cleared 1.10. A cautious trader might tighten a stop here rather than flip short. (All of these numbers are our own arithmetic on invented prices.)

Crossover signals: the basic reading

Investopedia describes the classic signals this way. A buy signal appears when VI+ has been below VI- and crosses above it. A sell signal appears when VI- has been below VI+ and crosses above it. Overall, the line on top generally tells you whether the security is in an uptrend or a downtrend.

ChartSchool adds a nuance worth keeping in mind: because one line is always above the other, the indicator always has a clear bullish or bearish bias. That is handy, but it also means the vortex indicator will happily give you a “trend” when the market has none. Its own examples show periods where both lines hovered around 1 while prices consolidated, and those stretches produced whipsaws.

On Indian charts you’ll see this most in range-bound large caps during quiet results-free weeks, or in Nifty around big event days when price swings both ways and goes nowhere. Two lines tangled near 1.0 is the indicator’s way of saying “no one is in charge”.

Using the 0.90 and 1.10 thresholds

ChartSchool suggests a way to cut down on false crossovers: set signal levels just above and below 1. A bullish signal then comes in two parts:

1. Downward movement weakens, with VI- slipping below 0.90.
2. Upward movement strengthens, with VI+ climbing above 1.10.

Bearish signals are the mirror image: VI+ drops below 0.90, then VI- rises above 1.10. Once a threshold signal fires, ChartSchool treats it as in force until an opposite threshold signal comes along. In its example of a daily chart with a 23-period setting, there were numerous crosses of the two lines but only three threshold signals over twelve months. That is the trade-off in a nutshell. Far fewer signals, and you’ll be later into each move, but you skip a lot of the noise.

A related habit from the same source: treat a bullish crossover as more believable once VI+ also moves above 1, and a bearish one once VI- moves above 1.

A crossover tells you the balance has shifted. A threshold break tells you the shift has some muscle behind it.

Choosing the lookback period

The period setting changes the personality of the indicator more than anything else.

• Shorter (14 on daily charts): more responsive, more crossovers, more false alarms. ChartSchool notes that a 14-period daily setting is much more sensitive than a 23-period one.
• Longer (21 to 30 on daily charts): smoother lines and fewer signals. Investopedia suggests raising the period, for example to 25 instead of 14, when choppy price action is producing false signals.
• Weekly charts: ChartSchool’s QQQ example uses a 26-period weekly setting, which works out to roughly six months, to judge the bigger trend.

There’s no magic number. A swing trader looking at a two-to-three-week holding period on a Nifty 100 stock will want something different from a positional investor checking weekly charts once a weekend. Our suggestion: pick one setting, write it down, and test it on a few stocks you know well before trusting it with money.

Combining timeframes and other tools

Both sources are blunt that the vortex indicator should not be used alone. Investopedia says it works best alongside other reversal patterns. ChartSchool says chartists should use other aspects of technical analysis to confirm it, improve reward-to-risk, or generate the actual buy and sell triggers. In its example, the indicator “provided the alert and the price chart provided the signals”.

A few pairings that make sense:

• Weekly for direction, daily for timing. ChartSchool suggests using the indicator on weekly or monthly charts to define the bigger trend, then on daily charts to find signals within it. If the weekly VI+ is on top, you only act on bullish daily crossovers.
• A moving-average filter. ChartSchool’s suggested scans pair a +VI crossover with price above its 50-day simple moving average, and a -VI crossover with price below it. That one rule keeps you from buying crossovers inside a broader downtrend.
• Chart patterns and levels. A bullish crossover that coincides with a breakout from a triangle or a reclaim of a support zone carries more weight than a crossover in the middle of nowhere.
• Other trend tools. If you already use the Aroon indicator or the Parabolic SAR, the vortex indicator can act as a second opinion on whether a new trend is real.

A simple checklist before acting on a signal

Here is a routine we’d use on an NSE daily chart. It’s a framework, not a system with tested returns, so adapt it.

1. Check the bigger picture. Is the weekly vortex indicator bullish or bearish? Trade in that direction only.
2. Look for the daily crossover. Note the date VI+ and VI- swap places.
3. Ask for confirmation. Has the leading line moved above 1? Better still, has the threshold pattern (one line under 0.90, the other over 1.10) completed?
4. Check price itself. Is the stock above its 50-day average for a long, or below it for a short? Is there a breakout or breakdown on the chart?
5. Set the stop first. A recent swing low or a multiple of ATR works. If the stop is so far away that the position size becomes tiny, skip the trade.
6. Know your exit. An opposite crossover, or an opposite threshold signal if you’re running the stricter version, ends the trade.

Where the vortex indicator lets you down

• Sideways markets. The single biggest weakness. When both lines sit near 1, every small push creates a crossover. If you see three or four crosses in a few weeks, step back.
• Lag. It is built on sums of past bars. By the time a 14- or 25-period sum flips, part of the move has already happened. Threshold signals lag even more.
• Gap-heavy stocks. True Range accounts for gaps, but stocks that gap often around results or news can produce sharp swings in the lines that reverse just as quickly.
• Illiquid counters. ChartSchool’s scans begin with a minimum average volume filter for a reason. On thinly traded small caps, a single large order can distort highs and lows and therefore both lines.
• False precision. A VI+ of 1.11 versus 1.09 is not a meaningful difference in most cases. Treat the thresholds as zones, not tripwires.

The short version

The vortex indicator measures upward and downward range expansion, adjusts both for volatility, and shows you which one is winning. Crossovers flag a possible change of trend. The 0.90 and 1.10 thresholds filter out a lot of the noise at the cost of later entries. Longer periods smooth the lines; shorter ones make them twitchy. And like every indicator, it works best as the alarm bell, with price action and risk management doing the actual deciding.

If you want to place it in a wider toolkit, our guide to technical analysis for Indian stocks covers how trend, momentum and volume tools fit together.

Disclaimer: This article is for educational purposes only and is not investment advice. The indicator’s origin, formula and signal rules are summarised from Investopedia’s vortex indicator explainer and StockCharts ChartSchool, both linked above and checked on October 21, 2026. The stock prices in the worked example are made-up numbers used only to show the calculation, and the checklist is our own framework, not a tested strategy. Trading involves risk of loss. Please do your own research and consult a SEBI-registered investment adviser before making any trading or investment decision.