What it is
RVI was popularised by John Ehlers. It is similar in spirit to Balance of Power but smoothed with weighted averages that reduce noise, and it is read mainly through crosses of its signal line rather than levels.
There are no fixed overbought or oversold levels; the line usually swings between about -0.5 and +0.5, depending on the market and timeframe.
How it is calculated
1. Numerator: a weighted average of (close minus open) over the last 4 candles, weighted 1, 2, 2, 1. 2. Denominator: the same weighted average of (high minus low). 3. Add up each over 10 candles and divide: RVI = sum of numerators / sum of denominators. 4. Signal line = the same 1, 2, 2, 1 weighted average applied to RVI.
Settings
| Setting | Default | Range | What it changes |
|---|---|---|---|
| Length | 10 | 2 to 200 | How many candles are summed. Longer makes the line slower and its crosses rarer. |
How to read it
How to trade it
- 1
Set the direction on a higher timeframe, for example 4 hour gold above its 50 EMA.
- 2
On the 1 hour chart, wait for RVI to cross above its signal line after a pullback.
- 3
Enter on the close of the crossover candle if price is above the 20 EMA.
- 4
Stop below the pullback low, for example 8 to 12 points on 1 hour gold.
- 5
Exit on the opposite cross, or at 2 times the stop.
The long is cancelled if RVI crosses back below its signal line within two candles, or price closes below the pullback low.
WickSpeak writes a plain-English reading of RVI on the live candle: what it is, whether buyers or sellers have the energy now, how to trade it and what would prove it wrong. In Playbook, a condition can check when RVI crosses above or below its signal line, crosses above or below zero, stays above or below zero, or is rising or falling.
WickSpeak Relative Vigor Index is one of the extra WickSpeak versions of the oscillators. The line is coloured by strength: faint when the reading is weak, glowing when it is strong, mint above the zero line and pink below it. Crosses of the zero line are marked only once the candle has closed, so a marker never vanishes after it appears. A gold marker shows a stretched reading, the strongest few percent of the indicator's own range. Divergences between price and the line are drawn on both the chart and the indicator, and a chip shows the same reading on a higher timeframe.
Best markets and timeframes
Works on 15 minute to daily charts of gold, indices and forex. It is clearest in trending markets, where candles keep closing near one end of their range.
Common mistakes
- Taking every signal cross. The two lines cross often; take only those in the trend's direction.
- Looking for fixed overbought and oversold levels. RVI has none.
- Confusing it with the Relative Volatility Index, which shares the initials but measures something different.
Works well with
Questions traders ask
What does the Relative Vigor Index measure?
It measures how strongly candles close in the direction of their move, by comparing the body with the full range. It rests on the idea that prices tend to close higher than they open in uptrends.
What is the best RVI setting?
10 periods is the usual default. Shorter settings give more crosses and more noise; longer settings suit swing trading on 4 hour and daily charts.
How do you trade the RVI?
Buy when RVI crosses above its signal line in an uptrend and sell when it crosses below in a downtrend, with a stop beyond the last swing. Divergence with price is used as a warning.
Is RVI the same as RSI?
No. RSI compares gains with losses from close to close, while RVI compares each candle's close with its open relative to its range.