Vertical Horizontal Filter

Vertical Horizontal Filter

The Vertical Horizontal Filter (VHF) determines whether prices are in a trending phase or a congestion phase.

VERTICAL HORIZONTAL FILTER

There are three ways to interpret the VHF indicator:

  • You can use the VHF values themselves to determine the degree that prices are trending. The higher the VHF, the higher the degree of trending and the more you should be using trend-following indicators.
  • You can use the direction of the VHF to determine whether a trending or congestion phase is developing. A rising VHF indicates a developing trend; a falling VHF indicates that prices may be entering a congestion phase.
  • You can use the VHF as a contrarian indicator. Expect congestion periods to follow high VHF values; expect prices to trend following low VHF values.