Metastock Indicator Formula |
Relative Vigor Index Signals (RVI) |
Relative Vigor Index Signals (RVI):
To understand relative vigor index signals concept first need to understand relative vigor index philosophy. Since 5-years practice of making trading and technical strategies, I able to identify the beauty of western and Japanese concept of technical analysis. I started thinking how to give a little mix concept of these broad psychological studies into one. To achieve this goal I identified opening price has significance in Japanese and less significance in western studies. I used this parameter with close for finding difference and tried to give meaning by using whole day volatility. At that moment I was thinking what name I have to suggest and how to gauge the performance of the market through defining rules. Simultaneously I was linked up globally with various technical analysis thorough mails doing different free e-mail courses and found one e-mail where I got this concept in details. I thought how I was accurate about this concept yes this is the way of measuring vigor of the pattern. The concept first introduces by John Ehlers who is also the creator of the highly acclaimed MESA and EPOCH trading programs.
The philosophy of the relative vigor index is as follows:
The philosophy behind this index is that the price tends to close higher than they
open in an up markets and closes lower than they open in down markets. The basic assessment of the concept is to identify energy of the moves, which usually established by where the price closes at it each eve of the up ladder.
For achieving the goal every concept is based on the certain logics. This concept is near the logic especially matched with the candle patterns, the white candle and the black candle a Japanese concept.
Where the logic of the concept are as follows:
Close – Open
Now for measuring this concept we need a yardstick that must have certain range of the particular day. Obviously in this regards we need the whole day activity in a sense of making particular range and that range could suppose to be as the day of high and low. I.E.
Range = High – Low
It is then for measuring we need to divide with actual concept for the purpose of
translating vigor of the move. I.E.
Relative Vigor Index (RVI) = (close – open) / (High – Low).
Through this it is very simple to visualize actual day of the activity for making inference of the day trading or specific swing trading strategy.
For making efficient signals I used certain own logics considered moving average
concept along with it and also put barriers for pointing out the overbought and
oversold region, which is based on the oscillator parameters. The reason is that
each price reflects the consensus of value among the mass of market participants at the moment or day of the trade. This is only moving average, which represents an average consensus of values in a selected time period and
its method. By default values I used 3 day moving average with simple average
method in each parameter numbers box. It is then the narration quoted with double moving average for smoothening the curves into symmetrical face. And also, assigned overbought and oversold state for day basis traders.
Formula coding: I am the user of metastock software, this coding can
x:= Input("Moving Average1", 1, 1000, 3);
Ma:=Input("Moving Average2", 1, 1000, 3);
y:= (CLOSE-OPEN)/Max((HIGH-LOW),0.000001)*100;
z:=Mov(y,x,S);
Sin(z-Mov(z,Ma,S));
1 ;
0;
-1;
Every concept has certain rules and conditions, which need to apply for adopting
philosophy. Obviously it has also certain rules, which are as follow:
Crossovers concept between RVI and moving line gives the force of specific direction. Through double-coated RVI concept with moving averages I made it easy to visualize and more interesting to identify consensus actual day of the trend.
?? When RVI signal below the mid line 0 indicate accumulation is expected reflects buy signal.
?? When RVI signal above the mid line 0 indicate distribution is expected reflects sell signal.
?? Above or just little below of the upper barrier at +0.8, assume overbought.
?? Below or just little above the lower barrier at –0.8 assume, oversold.
?? At barrier 0, reflect neutral or check with other indicator as well.
Good Trading,
Asad Tirmazie
Qualification of the indicator:
This indicator is not for recommendation to buy or sell, but rather provides you guideline for interpreting patterns or moves. This indicator should only be used by investors / traders / funds managing institutions and professionals of banks who are aware of the risk inherent in securities trading. I used my efforts as a man of ordinary prudence to provide best possible solution of the
problems. I personally accept no liability whatsoever for any loss arising from any use of signals or conventions or rules and conditions of this indicator.
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| Formula: |
x:= Input("Moving Average1", 1, 1000, 3);
Ma:=Input("Moving Average2", 1, 1000, 3);
y:= (CLOSE-OPEN)/Max((HIGH-LOW),0.000001)*100;
z:=Mov(y,x,S);
Sin(z-Mov(z,Ma,S));
1 ;
0;
-1; |
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