Relative Vigor Index (RVI) Technical Indicator [Oscillator]

Relative Vigor Index (RVI) - technical indicator of oscillator type (indicates overbought and oversold levels), based on the theory that in a rising market the closing price is usually higher than the opening price and vice versa for a falling market. Relative Vigor Index reflects the price position at the end of the period.

It is a standard indicator MetaTrader trading terminal.

Using the RVI technical indicator

To normalize the RVI index to the daily trading corridor, price changes are divided by the maximum intraday price range. For the most effective smoothing of calculations, the following is used simple moving average. The optimal period is 10.

To exclude possible inaccuracies a signal line is constructed: 4-period symmetrically weighted smoothed average of values Relative Vigor Index. If the lines cross, it signals an opportunity to buy or sell.

Formula for calculating RVI indicators

RVI = (CLOSE-OPEN)/(HIGH-LOW),

Where:

- OPEN - opening price;
- HIGH - maximum price;
- LOW - minimum price;
- CLOSE - closing price.