What it is
The Relative Vigor Index (RVI) is a momentum oscillator developed by John Ehlers. It evaluates the strength of a trend by comparing the closing price of an asset to its trading range.
How it works
RVI operates on the principle that prices tend to close higher than they open in uptrends, and lower than they open in downtrends. It normalizes the price change relative to the maximum range of the period.
Trading signals
- Crossovers: Buy when the RVI line crosses above the signal line.
- Divergence: Look for price action vs. RVI discrepancies to spot potential reversals.
- Overbought/Oversold: Extreme levels may indicate a exhaustion of the current move.
Basic settings
The standard setting for RVI in TradingView is a period of 10. Traders often adjust this to smooth out noise for longer-term analysis. This content is for educational purposes only, not financial advice.
