Using Relative Vigor Index Indicator to trade the financial market

By QuintoTrader | Quinto Trader | 17 Jul 2019


Relative vigor index is a crossover oscillator indicator created by John Ehlers. Since Relative vigor index is a crossover oscillator indicator, it, therefore, ranges from a negative value to positive value with 0 being the centerline and two crossover lines, the blue line which is the Relative Vigor Index Line and the red line which is the signal line. Therefore, since the Relative Vigor Index is a crossover oscillator indicator, it is therefore based on overbought and oversold market condition when the two-line crosses over. Therefore, the sell or buy signal will take place when there is a crossover at below 0 or at above 0.

                                   Overbought market crossover

For the overbought market, the Relative Vigor Index oscillator will cross below the signal line at above 0. This will signal the trader to close any buy position and open a sell position since the market will start moving downwards. This is indicated from the candlesticks chart below;

rvi.png


From the candlesticks chart above, there are 3 points. Point A which is blue in color is the Relative Vigor index line while point B which is red line is the signal line. Point C is the crossover point. At point C, the Relative Vigor Index oscillator has crossed below the signal line at above 0 thus an indication of an overbought market. This will signal the trader to close any buy position and open a sell position since the market is starting to move downwards as indicated from above.

                                       Oversold Market Crossover
For the oversold market, the Relative Vigor Index oscillator will cross above the signal line at below 0. This will signal the trader to close any sell position and open a buy position since the market will start moving upwards. This is indicated from the candlesticks chart below;  

rvi2.png


From the candlesticks chart above, there are 3 points. Point A which is blue in color is the Relative Vigor Index line while point B which is red line is the signal line. Point C is the crossover point. At point C, the Relative Vigor Index oscillator has crossed above the signal line at below 0 thus an indication of an oversold market. This will signal the trader to close any sell position and open a buy position since the market is starting to move upwards as indicated from above.  

Recommendation: If you are a day trader just use 1 min, 5 min, 15 min, and 30 min timeframe while if you are a swing trader just use 1 hour and above timeframe, if you want Relative Vigor Index indicator to work well for you 

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QuintoTrader
QuintoTrader

Trader, Blockchain Technologist and Contentpreneur. Also founder and CEO @ Quinto Trader


Quinto Trader
Quinto Trader

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