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Indicators: Fisher RVI

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Automated-Trading
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Fisher RVI:

Relative Vigor Index (RVI) indicator is used in technical analysis to measure the conviction of a recent price action and the likelihood that it will continue. The RVI compares the positioning of a security's closing price relative to its price range, and the result is smoothed by calculating an exponential moving average of the values.

The indicator is calculated by using the following formula:

This indicator has an addition of Fisher Transform to the RVI. The Fisher Transform enables traders to create a nearly Gaussian probability density function by normalizing prices. In essence, the transformation makes peak swings relatively rare events and unambiguously identifies price reversals on a chart. The technical indicator is commonly used by traders looking for extremely timely signals rather than lagging indicators.

Author: Mladen Rakic

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