The Relative Vigor Index (RVI) was developed by John Ehlers, who is a well-known figure in technical analysis who often applied digital signal processing techniques to trading. He introduced the RVI in the early 2000s as a way to track momentum by focusing on where a price closes within its daily range—typically near the high in an uptrend and near the low in a downtrend.

Ehlers presented the RVI in the early 2000s, building on the idea that momentum should be judged based on where the price closes within its range, a concept similar to the Stochastic Oscillator but with a different mathematical approach. The key insight behind the RVI is that in healthy uptrends, prices tend to close near the day's high, while in downtrends, they close near the day's low.

Unlike many traditional oscillators, the RVI uses sine-weighted moving averages to smooth the input data, making the indicator more responsive while maintaining clarity. Ehlers introduced this and other advanced concepts in his books, such as "Cybernetic Analysis for Stocks and Futures" and "Rocket Science for Traders."

Today, the RVI is available on most modern trading platforms, including cTrader, and is often used to confirm trend strength, especially in conjunction with other indicators such as MACD or RSI.

How to Trade Using the Relative Vigor Index (RVI)

The Relative Vigor Index (RVI) is primarily used to confirm trends and spot potential reversals. Here’s how traders typically use it on platforms like cTrader:

Signal Line Crossovers (Primary Strategy)

• The RVI is plotted with a central line and a signal line (usually a 4-period moving average of the RVI).

• Buy Signal: When the RVI line crosses above the signal line.

• Sell Signal: When the RVI line crosses below the signal line.

• This is similar to how MACD crossovers work.

Trend Confirmation

• Use RVI to confirm the direction of the trend shown by other indicators or price action.

• For example:

  • In an uptrend, the RVI should stay mostly above the signal line.

  • In a downtrend, the RVI stays below the signal line.

Divergence (Early Reversal Signals)

• Bullish Divergence: The price makes lower lows, but the RVI makes higher lows — this may signal a trend reversal to the upside.

• Bearish Divergence: The price makes higher highs, but the RVI makes lower highs — this may signal a downward reversal.

• Divergence is best used with caution and confirmed by price action or other indicators.

Combining with Other Tools

• Use with RSI or MACD: RVI is more effective when combined with another momentum or trend indicator.

• Volume confirmation can also help validate RVI signals.

How To Install & Remove

First, ensure that you have the cTrader trading platform installed. Then, unzip the file and double-click it to install the platform automatically.

• How to install
• How to open
• How to remove
• How to edit settings

Any Questions?

If you have any questions or encounter any issues, please first search our product help forum for the answer. If you cannot find it, post a new question.

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