Relative Vigor Index Indicator MT4 | MT5

The Relative Vigor Index (RVIx) indicator is a momentum-based oscillator, designed to gauge the strength of a trend by smoothing price data to filter out noise, offering a more reliable signal of price momentum.

When the RVIx is applied to the MetaTrader chart, it displays two lines, the first one is the rvi line (green) and the second is the rvi signal (red), calculating as the 4-period symmetrically W.MA (weighted moving average) of the first one. These two lines oscillate between -/+100, where values above the balance line (zero) suggest an uptrend, while below the zero indicate a downtrend.

Crossovers of these two lines provide buy and sell signals, allowing traders to identify trend direction and strength, and determine potential reversals with clarity. 

• Trend direction and strength:

- When the rvi line crosses above the rvi signal and then above the zero level, it indicates a bullish momentum, signaling a long opportunity.

- When the rvi line crosses below its signal line and the balance line respectively, it suggests a bearish movement, providing a potential sell signal

• Potential reversals:

- Bullish divergence: If the price forms lower lows while the RVIx indicates higher lows, that suggests a potential reversal to an uptrend. 

- Bearish divergence: If the price presents higher highs while the RVIx forms lower highs, that signals a potential reversal to a downtrend. 

When combined with other categories of technical analysis indicators, such as trend-following, volume, or patterns, the relative vigor index can enhance trading accuracy to traders.

- In the GBPJPY trading example on the MT4 chart, when the green line crosses below the red line, followed by a crossover below the balance line as well, signaling a downward trend. In every market movement, there are impulses and corrections. During a downtrend, traders should be looking only for short entries. So any crossover above the balance line indicates an exit point for the short position and below it signals a strong selling opportunity.

Toward the trend's end, as shown on the chart, the price forms lower lows while the RVIx shows higher lows, suggesting a bullish divergence. When the indicator rises above the zero level, that confirms the bullish reversal, signaling a buying opportunity. 

- In the NZDUSD trading example on the MT5 chart, when the rvi line crosses above its signal line, followed by a crossover above the zero level as well, signaling an upward trend. During an uptrend, traders should be looking only for long entries. So any crossover below the balance line indicates an exit point for long positions and above it signals a strong buying opportunity.

Near the trend's end, the price forms higher highs, but on the other hand, the indicator forms lower highs, indicating a potential bearish divergence. When the RVIx falls below the balance line, that confirms the bearish reversal, signaling a selling opportunity.