Relative Vigor Index - RVI

DEFINITION of 'Relative Vigor Index - RVI'

An indicator used in technical analysis that measures the conviction of a recent price action and the likelihood that it will continue. The RVI compares the positioning of a security's closing price relative to its price range, and the result is smoothed by calculating an exponential moving average of the values.

The indicator is calculated by using the following formula:

Relative Vigor Index (RVI)


BREAKING DOWN 'Relative Vigor Index - RVI'

The RVI indicator is calculated in a similar fashion to the stochastic oscillator, but the vigor index compares the close relative to the open rather than to the low. Traders expect the RVI value to grow as the bullish trend gains momentum because in this type of environment, a security's closing price tends to be at the top of the range while the open is near the low of the day.

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RELATED FAQS
  1. How do I use Relative Vigor Index (RVI) to create a forex trading strategy?

    Learn a forex trading strategy designed to maximize trend trading profits by using the Relative Vigor Index in conjunction ... Read Answer >>
  2. What is a common strategy traders implement when using the Relative Vigor Index (RVI)?

    Understand the indications given by the relative vigor index, and learn how it can be used to implement a momentum-based ... Read Answer >>
  3. What are the best technical indicators that complement the Relative Vigor Index (RVI)?

    Discover some of the best technical indicators that traders and analysts can employ to supplement the use of the relative ... Read Answer >>
  4. Why is the Relative Vigor Index (RVI) important for traders and analysts?

    Discover why traders and analysts use the Relative Vigor Index, or RVI, to measure the momentum of bull and bear movements ... Read Answer >>
  5. Why is the Exponential Moving Average (EMA) important for traders and analysts?

    Discover why chartists and technical analysts might use an exponential moving average (EMA) instead of a simple moving average ... Read Answer >>
  6. Are exponential moving averages more effective than simple or weighted moving averages?

    Learn about different types of moving averages, as well as moving average crossovers, and understand how they are used in ... Read Answer >>
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