Vertical Horizontal Filter (VHF)
  • Definition: Vertical Horizontal Filter is a volatility indicator that measures the ratio between the vertical and horizontal movement of price.
  • Use: VHF helps traders assess the trending or ranging behavior of a security. A higher VHF indicates a trending market, while a lower VHF suggests a range-bound market. Traders can use VHF to determine whether to employ trend-following or mean-reversion strategies.