Relative Vigor Index

Main Point of Relative Vigor Index

The Relative Vigor Index (RVI) is used to determine the energy or vigor of a market move by comparing the closing price to the opening price. In a bull market, the closing price is typically higher than the opening price, while in a bear market it is the opposite. The RVI normalizes the index by dividing the price change by the daily trading range and uses a Simple Moving Average for a smoother calculation. A period of 10 is commonly used for the best results.

Signal Line Construction

To avoid ambiguity, a signal line is constructed using a 4-period symmetrically weighted moving average of Relative Vigor Index values. The signal line helps identify buying or selling signals based on the convergence of lines.