The indicator used is Ekambit Strength Index (ESI), which makes it easy to identify trends and reversals using weighted multi-timeframe comparisons in a single chart.
We at Ekambit Technologies use it daily with consistent success in Indian markets, especially with NSE:NIFTY and NSE:BANKNIFTY.
ESI indicator rules: 1) Above mid-zone & rising: uptrend 2) Falling from high-zone: uptrend reversal 3) Below mid-zone & falling: downtrend 4) Rising from low-zone: downtrend reversal
Apply the same indicator to VIX (in the same chart!) or up to 3 correlated instruments to gain greater conviction for your trades, as shown in the chart. In addition to the chart timeframe, optionally 3 higher weighted timeframes can be used in ESI computation.
In effect, ESI is a single indicator which provides an insight of 16 indicators (4 timeframes * 4 instruments).
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