QUOTEX TRADING VORTEX INDICATOR
QUOTEX TRADING VORTEX INDICATOR is a Trading Indicator from Quotex Platform Trading has two lines (oscillators) that capture positive and negative trend movements in the market.
The calculation of the vortex indicator is relatively complicated. However, as we have written before, these calculations are not necessary for traders. All you need to do is to know how the indicator is interpreted.
In general there are three parts to calculate the Vortex indicator. First, you need to calculate the positive and negative movements on the high and lows of the last two days or periods.
Second, you need to calculate the True Range, which is a concept that was developed by Alex Wilder.
Finally, you need to normalize the positive and negative trend movements by dividing them by the true range
VORTEX INDICATOR FORMULA
Step 1 :
+VM = Present high less previous low
-VM = Present low less prior high.
+VM14 = 14-day sum of +VM
-VM14 = 14-period sym of -VM
Remember, 14 is the most common period used. Still, you can tweak it to include your preferred period.
Step 2, calculate the true range:
- Current high minus current low
- The same Current high minus previous close
- Current low minus previous close
- True Range (14) = 14-period sum of TR
Step 3: normalize the positive and negative trend movements:
+VI14 = +VM14/TR14
-VI14 = -VM14/TR14
As you can see, the process of calculating this information can be difficult but this should not worry you.
CONS OF USING THE VORTEX
There are several cons of using the Vortex indicator.
- Wrong signals – The indicator tends to provide the wrong signals, as shown in the Microsoft shares below.
- Not provided in most platforms – The Vortex indicator is not provided in default in most platforms.
MIX OF VORTEX INDICATOR & MACD
We recommend using additional indicators to confirm your transaction entry point. Moving Average Convergence Divergence can be an ideal partner for the vortex indicator.
It is recommended that you leave the MACD settings at their default values. However, you can experiment with the vortex indicator settings.
Look for the cross of these two indicators. When it happens at almost the same time (it doesn’t have to be exact), you can be sure that the signal to open a trading position is strong. To trade the vortex with MACD Quotex Trading becomes a good option.
Open long positions when the cross occurs after a long downtrend. The two should be fairly close to each other, but they don’t have to occur at the same time. The distance between 3 to 4 candles is a reliable distance. With a 5 minute time frame, you can hold a trade open for about 30 minutes.
Open a sell trade when the intersection of these two indicators occurs after an uptrend. Again, you can maintain an open position for about 30 minutes if you use the 5 minute time frame.