RVI (Relative Vigor Index)

The Relative Vigor Index (RVI) is a technical analysis indicator that helps measure the strength of price movements. RVI analyzes the relationship between price movements and volume, and is used as an oscillator to measure the strength of price movement.

RVI was developed by John Ehlers in 1984. The indicator is based on the closing prices of price movements and is typically displayed as a line chart. RVI is considered a momentum oscillator used to measure the strength of price movements.

To calculate RVI, the following steps are followed:

1. Firstly, closing prices are used to calculate RVI.

2. To measure the strength of price movement, the difference between the closing price of the next period and the opening price of the current period is calculated.

3. This difference is divided by the high and low price range of the current period.

4. Finally, an average of these calculated values is taken to obtain the RVI value.

RVI is typically calculated using a 14-period, but this period value can be adjusted depending on the preferences of the trader.

Interpreting RVI involves looking at situations where the indicator moves above or below the zero line. A positive RVI value indicates that price movement is strengthening, while a negative value indicates that price movement is weakening.

RVI can also be used to identify overbought or oversold conditions. Generally, when RVI is above the zero line, it is interpreted as a buying signal, and when it is below the zero line, it is interpreted as a selling signal.

However, it should be noted that RVI can generate false signals and should be used in conjunction with other technical analysis tools. RVI can provide more reliable results when used in combination with other indicators.

In conclusion, the Relative Vigor Index (RVI) is a momentum oscillator that measures the strength of price movements. It is used to identify situations where price movement is strengthening or weakening. RVI can provide better results when used in conjunction with other technical analysis tools. However, it should be interpreted carefully as it can generate false signals.