What it is
The Vertical Horizontal Filter was introduced by Adam White in 1991. It compares the distance price travelled from its highest to lowest close (the vertical part) with the total of every close to close step along the way (the horizontal part).
If most of the steps went the same way, VHF is high: a trend. If price zigzagged and ended up near where it started, VHF is low: a range. It sits in its own pane.
How it is calculated
1. Over the last 28 candles, find the highest close and the lowest close and take the difference. 2. For the same 28 candles, add up the size of every close to close change, ignoring whether it was up or down. 3. Divide the first number by the second. A perfectly straight move scores 1. Lots of back and forth scores close to 0.
Settings
| Setting | Default | Range | What it changes |
|---|---|---|---|
| length | 28 | 2 to 300 | How many candles it looks back. Shorter reacts faster to new trends but flips more often. |
How to read it
How to trade it
- 1
Use VHF to choose the playbook: trend trades when it rises, range trades when it falls.
- 2
Entry trigger (trend): VHF rises above its own average and price closes above a 20 period moving average. On US30 1 hour, buy that close.
- 3
Stop: below the last swing low, typically 60 to 100 points on US30 1 hour.
- 4
Target: 2 times the stop, or exit when VHF turns down and falls below its own average.
- 5
When VHF is falling, fade the edges of the range instead, with stops just outside it.
The trend idea is cancelled if VHF drops back below its own average and price closes back through the moving average.
WickSpeak draws it on the chart and writes a plain-English reading on the live candle: what it is, what it is doing now, how to trade it and what would prove it wrong. Playbook can test it as a condition in a play: is above or below a number, crosses above or below a number, is above or below its own average, is rising and is falling.
Best markets and timeframes
Works on any market; most useful on 1 hour to daily charts of gold, US30 and NAS100, where trends and ranges alternate over days.
Common mistakes
- Expecting VHF to say up or down. It only says trending or not.
- Using fixed thresholds from another market; compare with its own history.
- Acting on a single tick up; wait for VHF to hold above its average.
Works well with
Questions traders ask
What does the Vertical Horizontal Filter show?
It shows whether price is trending or ranging. Rising values point to a trend and falling values to a sideways market.
What is the default VHF period?
28 is a common default. Shorter periods such as 14 react quicker but give more false signals.
Is VHF better than ADX?
They do a similar job in different ways. VHF compares net distance with total distance; ADX measures directional movement. Many traders find VHF reacts a little faster.
Does a high VHF mean buy?
No. A high VHF means a strong trend in either direction. Check which way price is moving before choosing a side.