RVI Gold Analysis & Relative Vigor Index Signals

Created by John Ehler

The Relative Vigor Index combines the older concepts of analysis with modern digital signal processing theories and filters to create a practical and useful indicator.

The basic principle behind it is simple -

• Gold Prices tend to close higher than they open in up-trending markets and
• Gold 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. The 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 and opening xauusd price, and this value is then averaged to the mean daily range & then drawn.

This makes the index a responsive oscillator that has quick turning points which are in phase with the market cycles of prices.

Analysis & Generating Signals

The Relative Vigor Index is an oscillator. The basic technique of interpreting the index is to use the crossover of the RVI and the SignalLine. Signals are generated when there a cross-over of the 2 lines.

Bullish Signals - a buy signal occurs when the RVI crosses above the Signal-Line.

Bearish Signals - a sell signal occurs when the RVI crosses below the Signal-Line.

Buy & sell signals generated using the cross over technique