The Vortex indicator consists of two oscillators measuring both an upward and downward price movement. The Vortex indicator derives its inspiration from the natural flow and vortex formation in water which usually occurs in the rivers.
This Vortex Indicator System can be used to identify the start of a trend and subsequently confirm trend direction.
A simple cross of the two oscillators is used to signal the start of a trend. After this crossover, the trend is up when +VI line (Green) is above – VI line (Red) and down when – VI (Red) is above the +VI (Green). Second, a cross above or below particular level (here 1.05) can signal the start of a trend and this level can be used to confirm trend direction.
In this trading system i have add a filter at the level 1.05 in order to improve the performance of the vortex.
In fact, with this filter, the vortex is much improved in forecast of the market.
Time Frame : H1, H4
Metatrader MT4 Indicators:
=> Vortex Indicator (28 period);
=> Megatrend (89, period).
Trade Rules for Vortex Trading System
Condition: VM signals above 1.05 level (dotted red line).
When VM+(Green) crosses above VM-(Red) the trader should open a Buy order and
Megatrend line is blue in color.
When VM-(Red) crosses below VM+(Green) the trader should open a Sell order and
Megatrend line is red in color.
Stop loss X pips above or below Dot line (blue and red of Buy- Sell Indicator).
X Pips = Spread of The Curreny Pair Being Traded