Herrick Payoff Index is one of forex technical indicator used in forex technical analysis. Herrick Payoff Index uses analyzing of volume, price changes, and open interest changes to determine the amount of money flowing into or out of a futures contract.

HPI uses daily high and low prices, volume and open interest – preferably of all contracts (futures and options) – from a period of at least three weeks. HPI applies these to prices of the most active delivery month.

The Herrick Payoff Index (HPI) uses volume, open inerest, and price to signal bullish and bearish divergences in the price of a future or options contract. The use of open interest in the calculation of the HPI means the indicator can only be used with futures and options.

In absolute numbers, a major reversal is often considered to be a peak in NH-NL at +100 or less. If higher than +100, the market may not collapse, but it will likely not hit new highs. If the NH-NL low approaches -100, then a major upside reversal is imminent. If, however, NH-NL is lower than -100, the downtrend is losing a bit of strength, but it will probably not immediately reverse course to the upside.