Vortex Indicator is a short-term technical strategy which uses two built-in indicators True Strength Index and Vortex to catch near-term opportunities from the market’s movements. In this article, we will show you how to apply this powerful trading strategy to make profits from the Forex market.
What is Vortex Indicator
Meanwhile, the Vortex indicator was produced by Austrian inventor Viktor Schauberger, whose job is to study the flow of water in rivers and turbines. Taking the idea that actions within financial markets are the same with the vortex motions found in water, Mr. Schauberger developed this indicator to measure market momentum. Since the Vortex strategy creator found out the power as well as the great combination of these two indicators, he has developed this trading technique with the main intention to ride on the market’s waves and spot short-term trading occasions.
Vortex indicator setting:
- A default TSI indicator (25,13,13);
- A default Vortex beacon (14).
Testing this strategy requires a big effort since we have to constantly monitor the platform. Fortunately, hard work pays off: the Vortex indicator has brought us more than 2000 pips for 6 months, with the win-rate so far confirmed at 84.34%. What makes the strategy wonderful is that it could be used on the 1-minute chart.
How does a vortex indicator work?
To establish the strategy, you just need to add the required indicators which are available in the FinmaxFX platform. You can start finding entries right after the Vortex is installed.
A bullish signal is confirmed when the following requirements are satisfied:
- The TSI’s blue line crosses above its red line;
- The Vortex blue line also turns above its red one.
Conversely, entering a bearish position requires the following conditions:
- The TSI’s blue line crosses below its red line;
- The Vortex blue line also turns below its red one.
If you like this strategy, you might also be interested in this best Renko Trading System
Below are some important terms when use vortex pattern:
- You must wait the candle of confirmation to be fully close before making any trading decisions;
- Only one position should be entered at a time;
- The stop-loss should be set of 8 to 10 pips while the take-profit is 15 to 20 pips.
Pros and cons
- Very flexible and easy-to-use;
- Requiring no custom indicators;
- Generating reliable signals by strict entering rules;
- Allowing traders to scalp the market.
- Necessitating traders to constantly observe the trading platform to seek entries;
- Requiring a very high level of patience;
- Having a high-risk level.
The Vortex Indicator is a very effective short-term trading tool that is suitable for near-term Forex traders who look to trade within a fixed period of the day. With a win ratio affirmed higher than 80% as well as the large benefits described above, we believe this strategy could be a very good companion given a strict usage. Nevertheless, please remember the Vortex is high-risk because it’s a near-term strategy. Therefore, don’t forget to use risk controlling and psychology managing methods when trading with it.