RVI Trading Technical Analysis and Relative Vigor Index Signals
Developed by John Ehlers
The Relative Vigor Index combines the older concepts of technical analysis with modern digital signal processing theories and filters to create a practical & useful indicator.
The basic principle behind it is simple -
- Prices tend to close higher than they open in up-trending markets and
- Prices close lower than they open in down-trending markets.
The momentum (vigor) of the move will therefore established by where the prices end up at the close of the candle. Relative Vigor Index plots 2 lines the RVI Line and the signal Line.
The RVI index is essentially based on measuring of the average difference between the closing & opening price, and this value is then averaged to the mean daily trading range and then plotted.
This makes the index a responsive oscillator that has quick turning points which are in phase with the market cycles of prices.
Trading Technical Analysis and How to Generate Trading Signals
The Relative Vigor Index is an oscillator. Basic technique of analyzing the index is to use the crossovers of the RVI & the SignalLine. Trading Signals are generated when there is a cross-over of the 2 lines.
Bullish Signals - a buy signal occurs when the RVI crosses above the SignalLine.
Bearish Signals - a sell signal occurs when the RVI crosses below the SignalLine.
Buy & sell signals generated using the cross over technique
What is a Trading Plan? - Writing a Plan Example Template
Alternatives: EA Automated Robots or Copier Trading Signals
