Relative Vigor Index (RVI)

The Relative Vigor Index (RVI) is a technical analysis indicator used to measure the strength and speed of price movements. It is based on the relationship between the opening and closing prices and is used to generate buy and sell signals.

The RVI was developed by Gerald Appel and is considered a momentum indicator. It measures the strength of price movements by comparing closing prices to opening prices. The indicator plots a line to determine whether price movements are in a positive or negative trend.

The RVI is calculated using the following steps:

1. First, the direction of price movement is determined for each price bar. This can be identified as a positive value if the closing price is greater than the opening price, or a negative value if the closing price is less than the opening price.

2. The sum of the positive and negative values is calculated.

3. The RVI value is calculated by dividing the sum of the positive values by the sum of the negative values.

4. The RVI value ranges from 0 to 2. Values above 1 are generally interpreted as strong buy signals, while values below 1 are interpreted as strong sell signals.

The RVI is used to generate buy and sell signals. While measuring the strength and speed of price movements, it also helps identify overbought and oversold zones. When the RVI value is above 1, it can be interpreted as a buy signal, and when the value is below 1, it can be interpreted as a sell signal.

The RVI should be used in conjunction with other technical analysis tools and indicators to obtain more reliable results. It is also important to note that the RVI can produce false signals and is not always accurate.