The relative vigor index (RVI) is a momentum oscillator that measures the conviction, or vigor, behind a price move by comparing where a candle closes to its full trading range. The idea is straightforward. In a strong uptrend prices tend to close near the high, and in a strong downtrend they close near the low. RVI turns that tendency into a signal line you can trade.
What is the relative vigor index?
The relative vigor index was developed by John Ehlers and popularised in his book Rocket Science for Traders. It belongs to the same family as the stochastic oscillator and the RSI, a bounded momentum tool that plots in a separate pane below price. What sets RVI apart is the input. Rather than tracking closing price against a lookback range, it tracks the relationship between the open and the close, then normalises that against the high-low range of the bar.
The logic rests on a well-known market observation. When buyers are in control, a bar tends to close higher than it opened. When sellers dominate, the close sits below the open. By smoothing that open-to-close spread over several bars, RVI filters out single-bar noise and shows whether the recent buying or selling pressure has real momentum behind it, or whether the move is running out of energy.
How is the relative vigor index calculated?
At its core the relative vigor index is one ratio, smoothed twice. The raw building block for each bar is the close minus the open, divided by the high minus the low:
Raw RVI = (Close − Open) / (High − Low)
A single bar of that ratio is far too jumpy to trade, so Ehlers applies a symmetric weighted moving average across four bars, using the weights 1, 2, 2, 1 divided by 6. The same weighting goes on both the numerator, the open-to-close spread, and the denominator, the high-low range. The two smoothed values are then divided and averaged over the chosen period, most commonly 10 bars.
- Start with the numerator: take close minus open for the current bar and the previous three, weight those four values 1, 2, 2, 1, and add them together.
- Do the same for the denominator, using high minus low across the same four bars with the same 1, 2, 2, 1 weights.
- Divide the smoothed numerator by the smoothed denominator, then average the result across the lookback period, usually 10 bars. That gives you the RVI line.
- Build the signal line by applying the same four-bar 1, 2, 2, 1 weighting to the RVI line itself. The two lines crossing each other is what triggers a signal.
You never need to compute this by hand. Every serious charting package, including the tools inside Volity MT, plots RVI and its signal line from the raw price data automatically. Understanding the maths still matters, because it tells you what the indicator reacts to: the balance between open-to-close conviction and the size of the bar. A big range with a small open-to-close spread produces a weak reading, which is exactly the exhaustion RVI is built to catch.
What does the RVI signal?
The relative vigor index gives you three readable signals, in rough order of reliability.
- A signal line crossover is the primary trigger. When the RVI line crosses above its signal line, buying vigor is building and the reading is bullish; a cross below is bearish. It is the same mechanic that made the stochastic popular.
- Centreline behaviour acts as a bias filter. RVI oscillates around zero, so readings that hold above zero back an underlying bullish lean and readings below zero back a bearish one. Many traders take bullish crossovers only while RVI sits above the centreline.
- Divergence is where RVI often earns its keep. When price prints a higher high but RVI prints a lower high, the vigor behind the rally is fading before price has turned, an early warning of a possible reversal.
Because RVI is smoothed twice, it is slower to flip than a raw stochastic. The extra smoothing is deliberate. It cuts the number of false crossovers in choppy conditions, and the price you pay for that is a little lag when a genuine turn finally arrives.
How do you trade the relative vigor index?
A workable RVI routine layers the signal on top of trend context instead of trading every crossover blindly. It works the same way on forex pairs, indices and commodity CFDs.
- Read the higher-timeframe trend first, with a moving average or simple structure. RVI works best as a timing tool inside an established trend, not as a standalone trend-caller.
- Wait for a crossover in the direction of that trend. In an uptrend, take RVI crossing above its signal line near a pullback low; in a downtrend, take the cross below into a bounce.
- Use the centreline to confirm, preferring bullish signals while RVI is at or above zero and bearish signals while it is at or below zero. That single filter removes a lot of counter-trend noise.
- Anchor a protective stop beyond the swing that produced the signal rather than at an arbitrary distance, and let the chart define your risk.
- Manage the exit when RVI crosses back through its signal line, when a divergence appears against your position, or when a pre-set target is hit.
Divergence trades deserve a separate note. Spotting a bearish divergence, a higher price high against a lower RVI high, is not an entry on its own. Wait for the signal line crossover to confirm the turn before you act. The divergence tells you the fuel is running low; the crossover tells you the car has started to roll backward.
RVI vs stochastic vs RSI: how do they differ?
All three are momentum oscillators, yet they measure different things and behave differently. This table shows where RVI fits against the MACD family of crossover tools and the two best-known range oscillators.
| Indicator | Core input | Range | Primary signal | Best used for |
| Relative vigor index | Open-to-close spread over high-low range | Oscillates around 0 | RVI / signal line crossover | Confirming trend conviction and divergence |
| Stochastic oscillator | Close relative to recent high-low range | 0 to 100 | %K / %D crossover, overbought/oversold | Timing pullbacks and range reversals |
| RSI | Average of up moves vs down moves | 0 to 100 | 70 / 30 thresholds, divergence | Gauging overbought and oversold extremes |
In practice many traders pair RVI with a range-based tool. The RSI or the stochastic tells you when price is overbought or stretched; RVI tells you whether the move pulling it back has real vigor. When both agree, the signal is stronger. When they disagree, you have a reason to stand aside.
What are the limitations of the RVI?
The relative vigor index is a confirmation tool, and it fails in the ways confirmation tools tend to fail. In a sideways, low-volatility market the open-to-close spread flips sign from bar to bar, and RVI whipsaws across its signal line, firing crossover after crossover that leads nowhere. The double smoothing also introduces lag, so the first part of a sharp reversal is often gone before the crossover confirms it.
Treat RVI as one input in a plan, never a complete system. Combine it with trend structure, a volatility read and disciplined position sizing. Leveraged products such as CFDs magnify both correct and incorrect signals, so a stop and a fixed risk per trade are essential. They are what keep a run of RVI whipsaws from turning into a serious drawdown.
How can you trade RVI setups on Volity?
Volity is an all-in-one money hub: one account for your wallet, payments and trading. The charting inside Volity MT plots the relative vigor index and its signal line on any instrument, so you can run the crossover, centreline and divergence approach across more than 40 forex pairs, global indices, commodities and crypto without switching platforms. Advanced order types let you attach a stop-loss, take-profit and trailing stop the moment you take a signal, and you can map the whole setup on the charts inside the Volity platform.
Because RVI is most useful on leveraged, two-directional markets, it pairs naturally with CFD trading, where you can act on both bullish and bearish crossovers. Leverage runs up to 1:500 on major forex pairs and scales down for indices, commodities and crypto, with the required margin shown before every order and negative balance protection in place. Execution is regulated by CySEC under UBK Markets, licence 186/12. Because CFDs are leveraged, they carry a high risk of losing money quickly, and regulators such as ESMA restrict how they are sold to retail traders, so size every position from its stop and check your instrument’s spread and swap on the published charges and fees page. You can open an account for nothing, rehearse the setup on a demo, invest from as little as $1, and start trading from $50 once you can wait out the noise for a clean signal.
For the wider toolkit that RVI sits inside, see the guide to technical indicators for trading.
Related patterns
Frequently asked questions
Is the relative vigor index a good indicator?
The relative vigor index is a reliable confirmation tool inside a trending market, especially for spotting when momentum is fading through divergence. It is weaker on its own in range-bound conditions, where it produces frequent false crossovers. Most traders use it alongside a trend filter and a range oscillator rather than as a standalone system.
What are the best RVI settings?
The standard relative vigor index setting is a 10-period lookback with the built-in four-bar signal line. Shorter periods make RVI faster and noisier, which suits scalping; longer periods make it smoother and slower, which suits swing trading. Test any change on historical data for your instrument and timeframe before you trade it live.
What is the difference between RVI and the stochastic oscillator?
Both use a two-line crossover, but the inputs differ. The stochastic oscillator measures where the close sits within a recent high-low range and is bounded between 0 and 100. RVI measures the open-to-close spread relative to the bar range and oscillates around zero. The stochastic is better for spotting overbought and oversold extremes; RVI is better for confirming the conviction behind a move.
Can you use the relative vigor index on any market?
Yes. Because it only needs open, high, low and close data, the relative vigor index works on forex, indices, commodities, stocks and crypto across any timeframe. On Volity MT you can apply it to every instrument in one account. Its performance depends far more on whether the market is trending than on which asset class you apply it to.
