Relative Vigor Index (RVI)
The Relative Vigor Index (RVI) is based on the idea that ascending candles are common for a bull market, and descending candles are common for a bear market. The price change is divided buy the maximum price range of the candle, in order to make the values normalized.
- The RVI is calculated as follows:
RVI = (CLOSE - OPEN) / (HIGH - LOW)
Sometimes the simple moving average (period=10) is used to smooth out the RVI graph. Also, a signal line is used, which is a 4-period exponential moving average of the RSI. When the lines intersect, it is a signal to open a buy or a sell position.