RVI Silver Analysis & 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 –

• Silver Prices tend to close higher than they open in up-trending markets &
• Silver 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 candlestick. The Relative Vigor Index plots two 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, & this value is then averaged to the mean daily range and then drawn.

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

Trading Analysis & How to Generate Trade Signals

The Relative Vigor Index is an oscillator. Basic technique of analyzing the index is to use the crossovers of the RVI & the SignalLine. Signals are generated when the there is a cross-over of the 2 lines.

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

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

Buy and sell signals generated using the crossover method