Relative Vigor Index (RVI) is a technical indicator that is used for making analysis on the financial market. It measures the conviction of a recent price action and the probability that it will continue. As a rule on the bull market the closing price is higher, than the opening price. Analogically, it is the opposite on the bear market. So using the Relative Vigor Index we see that the vigor, or the energy, of the move in this way is established by where the prices end up at the close. If you want to bring the index back to the daily trading range, divide the change of price by the maximum range of prices for the day. For more precise calculation, market participants may use Simple Moving Average. The most appropriate period is 10. To prevent from eventual ambiguity you have to draw a signal line, which is a4-period symmetrically weighted moving average of Relative Vigor Index values. The concurrence of lines may show you when to buy or to sell.
Calculation of this indicator ->
RVI = (CLOSE-OPEN)/(HIGH-LOW)
Where: OPEN — is the opening price; HIGH — is the maximum price; LOW — is the minimum price; CLOSE — is the closing price.