What is RVI?

<p id="isPasted">The Relative Vigour Index (RVI) is a technical analysis indicator designed to measure the conviction of the recent prevailing price action of an asset, as well as the possibility of its continuation in the short and medium term.</p><p>The RVI indicator was developed by Donald Dorsey in 1993. The author then updated it to the current version in 1995. RVI belongs to the broad Oscillator group of indicators, which essentially means that it helps traders to determine overbought and oversold conditions in the market.</p><p>However, while most oscillators focus on the high and low prices (extremes) within a certain period, the RVI pays more attention to the closing price, relative to the opening price.</p><p>In addition to overbought and oversold signals, oscillators also tend to communicate whether a trend is gaining momentum or losing it. The inherent danger of using oscillators is that they can deliver false signals in the middle of strong trends, but this can sometimes be mitigated by combining them with other indicators. Some of the most common oscillators, other than RVI, include Stochastics, MACD, RSI (Relative Strength Indicator), and CCI (Commodity Channel Index).</p>