Relative Vigor Index
The Relative Vigor Index measures the strength of a trend. It does this by comparing the closing price of an instrument to its trading range. Traders will look at whether the price of an instrument at closing was higher or lower than its opening price.
Prices tend to close higher than they open during an uptrend. In a downtrend, prices close lower than they open. Whenever the RVI starts to diverge from the price, it indicates that there may be a change in the trend.
Calculation of Relative Vigor Index Indicator
The Relative Vigor Index uses this formula:
RVI = (CLOSE-OPEN)/(HIGH-LOW)
These symbols are used in the formula:
OPEN – is the opening price;
HIGH – is the maximum price;
LOW – is the minimum price;
CLOSE – is the closing price.