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.

  1. Opening Price

    The price at which a security first trades upon the opening of ...
  2. Trend

    The general direction of a market or of the price of an asset. ...
  3. Closing Price

    The final price at which a security is traded on a given trading ...
  4. Momentum

    The rate of acceleration of a security's price or volume. The ...
  5. Technical Analysis

    A method of evaluating securities by analyzing statistics generated ...
  6. Stochastic Oscillator

    A technical momentum indicator that compares a security's closing ...
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  1. What are the best technical indicators that complement the Relative Vigor Index (RVI)?

    Some of the best technical indicators to complement using the relative vigor index (RVI) are moving averages and the average ... Read Full Answer >>
  2. How do I use Relative Vigor Index (RVI) to create a forex trading strategy?

    A forex trading strategy designed to make maximum profits from a long-term uptrend can be created using the Relative Vigor ... Read Full Answer >>
  3. What is a common strategy traders implement when using the Relative Vigor Index (RVI)?

    A common trading strategy that can be implemented using the relative vigor index (RVI) is to employ it in the same manner ... Read Full Answer >>
  4. What is the difference between fast and slow stochastics in technical analysis?

    The main difference between fast and slow stochastics is summed up in one word: sensitivity. The fast stochastic is more ... Read Full Answer >>
  5. What technical tools can I use to measure momentum?

    One of the main goals of every trader using technical analysis is to measure the strength of an asset's momentum and the ... Read Full Answer >>
  6. Would a slow stochastic be effective in day trading?

    Given the hundreds of indicators that are available to traders, finding the appropriate technical tools to use in day trading ... Read Full Answer >>

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