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.

RELATED TERMS
  1. Stochastic Oscillator

    A technical momentum indicator that compares a security's closing ...
  2. Demarker Indicator

    An indicator used in technical analysis that compares the most ...
  3. Average Price

    1. A representative measure of a range of prices that is calculated ...
  4. Data Smoothing

    The use of an algorithm to remove noise from a data set, allowing ...
  5. Indicator

    Indicators are statistics used to measure current conditions ...
  6. Triple Exponential Moving Average ...

    A technical indicator used for smoothing price and other data. ...
Related Articles
  1. Markets

    Use The Percentage Price Oscillator: The "Elegant Indicator" For Picking Stocks

    Technical analysis is basically an attempt to disprove the credo that "Past performance is not indicative of future results." The percentage price oscillator, which measures momentum, is among ...
  2. Trading

    Exploring Oscillators and Indicators: Stochastic Oscillator

    By Chad Langager and Casey Murphy, senior analyst of ChartAdvisor.com The stochastic oscillator is another well-known momentum indicator used in technical analysis. The idea behind this indicator ...
  3. Trading

    Simple Vs. Exponential Moving Averages

    These technical indicators help investors to visualize trends by smoothing out price movements.
  4. Trading

    Weighted Moving Averages: The Basics

    We take a closer look at the linearly weighted moving average and the exponentially smoothed moving average.
  5. Managing Wealth

    The Top Technical Indicators For Commodities Investing

    Traders can use "the usual suspects" (standard indicators for trend trading) when it comes to choosing indicators for investing in commodities. Here's how.
  6. Trading

    How To Best Analyze Relative Strength

    Relative strength indicators measure performance between similar instruments, uncovering opportunities that can translate into reliable profits.
  7. Trading

    Exploring Oscillators and Indicators: Conclusion

    By Chad Langager and Casey Murphy, senior analyst of ChartAdvisor.com The goal of every short-term trader is to determine the direction of a given asset's momentum and to attempt to profit from ...
  8. Trading

    Top 7 Technical Analysis Tools

    Technical indicators determine the direction of an asset’s momentum and whether that direction will continue. Here are seven used most.
  9. Managing Wealth

    Using Technical Indicators To Develop Trading Strategies

    Unfortunately, there is no perfect investment strategy that will guarantee success, but you can find the indicators and strategies that will work best for your position.
  10. Trading

    How Market Psychology Drives Technical Indicators

    The tenets of market psychology underlie each and every charting tool.
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. What is the difference between Stochastic Oscillator & Stochastic Momentum Index?

    Discover how the stochastic oscillator and the Stochastic Momentum Index differ and why the latter is considered a more refined ... Read Answer >>
  6. 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 >>
Hot Definitions
  1. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  2. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  3. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  4. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  5. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  6. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
Trading Center