Relative Vigor Index (RVI)

The Relative Vigor Index (RVI) is a momentum indicator used in technical analysis that measures the strength of a trend by comparing a security's closing price to its trading range while smoothing the results using a simple moving average (SMA). The RVI's usefulness is based on the observed tendency for prices to close higher than they open during uptrends, and to close lower than they open in downtrends. The Relative Vigor Index (RVI) is a technical momentum indicator. The RVI oscillates across a pre-determined center line rather than a banded trend. Divergences between the RVI indicator and price suggest there will be a near-term change in the trend.  Image by Sabrina Jiang © Investopedia 2021 The RVI formula may look complicated, but it is really fairly intuitive: NUMERATOR \= a \+ ( 2 × b ) \+ ( 2 × c ) \+ d 6 DENOMINATOR \= e \+ ( 2 × f ) \+ ( 2 × g ) \+ h 6 RVI \= SMA of NUMERATOR for  N  periods SMA of DENOMINATOR for  N  periods  Signal Line  \= RVI \+ ( 2 × i ) \+ ( 2 × j ) \+ k 6 where: a \= Close − Open b \= Close − Open One Bar Prior to  a c \= Close − Open One Bar Prior to  b d \= Close − Open One Bar Prior to  c e \= High − Low of Bar  a f \= High − Low of Bar  b g \= High − Low of Bar  c h \= High − Low of Bar  d i \= RVI Value One Bar Prior j \= RVI Value One Bar Prior to  i k \= RVI Value One Bar Prior to  j N \= Minutes/Hours/Days/Weeks/Months \\begin{aligned} &\\text{NUMERATOR}=\\frac{a+(2\\times b)+(2\\times c)+d}{6}\\\\\[7pt\] &\\text{DENOMINATOR}=\\frac{e+(2\\times f)+(2\\times g)+h}{6}\\\\\[7pt\] &\\text{RVI}=\\frac{\\text{SMA of NUMERATOR for $N$ periods}}{\\text{SMA of DENOMINATOR for $N$ periods}}\\\\\[7pt\] &\\qquad\\text{\\ Signal Line }=\\frac{\\text{RVI}+(2\\times i)+(2\\times j)+k}{6}\\\\\[7pt\] &\\textbf{where:}\\\\ &a = \\text{Close}-\\text{Open}\\\\ &b=\\text{Close}-\\text{Open One Bar Prior to }a\\\\ &c =\\text{Close}-\\text{Open One Bar Prior to }b\\\\ &d =\\text{Close}-\\text{Open One Bar Prior to }c\\\\ &e =\\text{High}-\\text{Low of Bar }a\\\\ &f =\\text{High}-\\text{Low of Bar }b\\\\ &g =\\text{High}-\\text{Low of Bar }c\\\\ &h =\\text{High}-\\text{Low of Bar }d\\\\ &i = \\text{RVI Value One Bar Prior}\\\\ &j = \\text{RVI Value One Bar Prior to }i\\\\ &k = \\text{RVI Value One Bar Prior to }j\\\\ &N = \\text{Minutes/Hours/Days/Weeks/Months} \\end{aligned} NUMERATOR\=6a+(2×b)+(2×c)+dDENOMINATOR\=6e+(2×f)+(2×g)+hRVI\=SMA of DENOMINATOR for N periodsSMA of NUMERATOR for N periods Signal Line \=6RVI+(2×i)+(2×j)+kwhere:a\=Close−Openb\=Close−Open One Bar Prior to ac\=Close−Open One Bar Prior to bd\=Close−Open One Bar Prior to ce\=High−Low of Bar af\=High−Low of Bar bg\=High−Low of Bar ch\=High−Low of Bar di\=RVI Value One Bar Priorj\=RVI Value One Bar Prior to ik\=RVI Value One Bar Prior to jN\=Minutes/Hours/Days/Weeks/Months 1. The Relative Vigor Index (RVI) is a momentum indicator used in technical analysis that measures the strength of a trend by comparing a security's closing price to its trading range while smoothing the results using a simple moving average (SMA). The RVI's usefulness is based on the observed tendency for prices to close higher than they open during uptrends, and to close lower than they open in downtrends. The Relative Vigor Index (RVI) is a technical momentum indicator. The RVI oscillates across a pre-determined center line rather than a banded trend. Divergences between the RVI indicator and price suggest there will be a near-term change in the trend.  Image by Sabrina Jiang © Investopedia 2021 The RVI formula may look complicated, but it is really fairly intuitive: NUMERATOR \= a \+ ( 2 × b ) \+ ( 2 × c ) \+ d 6 DENOMINATOR \= e \+ ( 2 × f ) \+ ( 2 × g ) \+ h 6 RVI \= SMA of NUMERATOR for  N  periods SMA of DENOMINATOR for  N  periods  Signal Line  \= RVI \+ ( 2 × i ) \+ ( 2 × j ) \+ k 6 where: a \= Close − Open b \= Close − Open One Bar Prior to  a c \= Close − Open One Bar Prior to  b d \= Close − Open One Bar Prior to  c e \= High − Low of Bar  a f \= High − Low of Bar  b g \= High − Low of Bar  c h \= High − Low of Bar  d i \= RVI Value One Bar Prior j \= RVI Value One Bar Prior to  i k \= RVI Value One Bar Prior to  j N \= Minutes/Hours/Days/Weeks/Months \\begin{aligned} &\\text{NUMERATOR}=\\frac{a+(2\\times b)+(2\\times c)+d}{6}\\\\\[7pt\] &\\text{DENOMINATOR}=\\frac{e+(2\\times f)+(2\\times g)+h}{6}\\\\\[7pt\] &\\text{RVI}=\\frac{\\text{SMA of NUMERATOR for $N$ periods}}{\\text{SMA of DENOMINATOR for $N$ periods}}\\\\\[7pt\] &\\qquad\\text{\\ Signal Line }=\\frac{\\text{RVI}+(2\\times i)+(2\\times j)+k}{6}\\\\\[7pt\] &\\textbf{where:}\\\\ &a = \\text{Close}-\\text{Open}\\\\ &b=\\text{Close}-\\text{Open One Bar Prior to }a\\\\ &c =\\text{Close}-\\text{Open One Bar Prior to }b\\\\ &d =\\text{Close}-\\text{Open One Bar Prior to }c\\\\ &e =\\text{High}-\\text{Low of Bar }a\\\\ &f =\\text{High}-\\text{Low of Bar }b\\\\ &g =\\text{High}-\\text{Low of Bar }c\\\\ &h =\\text{High}-\\text{Low of Bar }d\\\\ &i = \\text{RVI Value One Bar Prior}\\\\ &j = \\text{RVI Value One Bar Prior to }i\\\\ &k = \\text{RVI Value One Bar Prior to }j\\\\ &N = \\text{Minutes/Hours/Days/Weeks/Months} \\end{aligned} NUMERATOR\=6a+(2×b)+(2×c)+dDENOMINATOR\=6e+(2×f)+(2×g)+hRVI\=SMA of DENOMINATOR for N periodsSMA of NUMERATOR for N periods Signal Line \=6RVI+(2×i)+(2×j)+kwhere:a\=Close−Openb\=Close−Open One Bar Prior to ac\=Close−Open One Bar Prior to bd\=Close−Open One Bar Prior to ce\=High−Low of Bar af\=High−Low of Bar bg\=High−Low of Bar ch\=High−Low of Bar di\=RVI Value One Bar Priorj\=RVI Value One Bar Prior to ik\=RVI Value One Bar Prior to jN\=Minutes/Hours/Days/Weeks/Months 1. 2. Identify the open, high, low, and close values for the current bar. 3. Identify the open, high, low, and close values for lookback periods prior to the current bar. 4. Calculate SMAs for NUMERATOR and DENOMINATOR over the N period. 5. Divide NUMERATOR value from DENOMINATOR value. 6. Place the result in the signal line equation and plot it on a graph. The RVI indicator is calculated in a similar fashion to the stochastics oscillator but it compares the close relative to the open rather than comparing the close relative to the low. The two most popular trading signals include: **RVI Divergences**: Divergence between the RVI indicator and price suggests there will be a near-term change in the trend in the direction of the RVI's trend. Traders expect the RVI value to rise as the bullish trend gains momentum because, in this positive setting, a security's closing price tends to be at the top of the range while the open is near the low of the range.