The main point of Relative Vigor Index Indicator (RVI) is that on the bull market the closing price is, as a rule, higher, than the opening price.
It is the other way round on the bear market. So the idea behind Relative Vigor Index is that the vigor, or energy, of the move is thus established by where the prices end up at the close. To normalize the index to the daily trading range, divide the change of price by the maximum range of prices for the day. To make a more smooth calculation, one uses a symmetrically weighted moving average of the differences of the closing and openings prices, as well as maximum and minimum prices of the bar.
The best period at calculation of the indicator is considered 10. To avoid probable ambiguity one needs to construct a signal line, which is a symmetrically weighted moving averageof Relative Vigor Index values. The concurrence of lines serves as a signal to buy or to sell.
VALUE1 = ((CLOSE - OPEN) + 2 * (CLOSE (1)) – OPEN (1)) + 2*(CLOSE (2) – OPEN (2)) + (CLOSE (3) – OPEN (3))) / 6
VALUE2 = ((HIGH - LOW) + 2 * (HIGH (1) – LOW (1)) + 2*(HIGH (2)- LOW (2)) + (HIGH (3) – LOW (3))) / 6
NUM = SUM (VALUE1, N)
DENUM = SUM (VALUE2, N)
RVI = NUM / DENUM
RVISig = (RVI + 2 * RVI (1) + 2 * RVI (2) + RVI (3)) / 6
Full description of Relative Vigor Index is available in the Technical analysis: Relative Vigor Index
Translated from Russian by MetaQuotes Software Corp.
Original code: https://www.mql5.com/ru/code/8035
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