Relative Vigor Index

Relative Vigor Index

Relative Vigor Index

The Relative Vigor Index, also known as the RVI, is an indicator meant to be used in technical analysis. It shows traders a trend’s strength, no matter if the trend is bullish or bearish. In the rest of this article, we will show you everything you need to know about this special index, so that you can increase your chances while you’re trading on your platform. If you already have some experience in this business, then you know how valuable every piece of information can be and that you should gain them any way you can. So read on and see what you can learn from our experts.

Relative Vigor Index | What does it do?

First things first – the Relative Vigor Index compares two things: closing price and price range. From that, it can tell you how strong a trend actually is, which can help you a lot with planning your future moves. If your RVI value is high, that means that the trend is strong and relatively unlikely to change soon, while if the value is low, you can conclude that the trend doesn’t have a lot of juice in it, so you really shouldn’t expect it to last. A unique feature of the Relative Vigor Index is its signal line, which allows you to see moving averages of this index’s values. Based on that, you can know exactly when to buy call and when to go with put options. But we have more to discuss, so stay with us.

Relative Vigor Index | How to use it?

The Relative Vigor Index works best in cooperation with some other tool that can back its conclusions up. Relative Strength Index is most commonly used for that, but maybe some other Oscillators wouldn’t be a bad choice, either. This is done primarily if you’re looking to trade over longer periods of time. Naturally, a trend will change directions every now and again, only to get back on its original track. The RVI helps you determine how serious these deviations actually are and helps you decide whether to react or not, so it’s a pretty useful tool to have. If the RVI’s prediction is supported by your other indicator’s data, you would be well advised to make a move.

Relative Vigor Index | Conclusion

As you can see, mastering the Relative Vigor Index can help traders a lot. Still, some previous experience and knowledge are needed if you want to get a firm grasp on everything this indicator offers. Remember to always back RVI’s data with some other tool before you make your decision, and always check the signal line to get a sense of how the situation on the market is developing. This indicator is meant to help you plan ahead, so use it wisely. Also, do try to continue with your education – we have plenty of interesting articles on our website. Good luck!

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FURTHER READING:

1. Trading By The Minute (J. Ross, 1994)
2. How To Make Money In Stocks (William J. O’Neil, 1995)
3. The Greatest Business On Earth: A Simplified Guide To Trading Commodity Options (J. Prince, 2010)
4. Trade Your Way To Financial Freedom (Van K. Tharp, 1998)
5. Moats: The Competitive Advantages Of Buffet & Munger Businesses (B. Labitan, 2012)

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