Relative Vigor Index (RVI) Indicator For MT5
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Table Of Contents:
- Relative Vigor Index (RVI) Indicator For MT5
- Trading ideas with the Relative Vigor Index (RVI) Indicator For MT5
- Relative Vigor Index (RVI) Indicator For MT5 - Buy Entries
- Relative Vigor Index (RVI) Indicator For MT5 - Sell Entries
- Relative Vigor Index (RVI) Indicator For MT5 - Conclusion
The Relative Vigor Index (RVI) Indicator For MT5 is a well known oscillator which helps you detecting overbought and oversold condition. The values oscillate around the zero value.
Partially Automated Trading Besides Your Day Job
Alerts In Real-Time When Divergences Occur
The Relative Vigor Index (RVI) Indicator For MT5 is a highly technical indicator. The calculation process is relatively similar to the stochastic indicator.
However, the result obtained from the RVI curve is far better as analyzes the daily price range and transforms it into a simple curve. The curve usually makes a shift of 180 degrees when it reaches near the endpoint of the reference line zero.
The zero lines or the reference line can work like a classic level that will determine when the momentum of the trend is extremely high. But to open the trades, we have to take advantage when the shift in the RVI curve takes place.
It might be slightly challenging but if you know how to pick the right asset, things will be easier. But for that you have to know the favorable condition for this indicator or else, getting the desired result will be a big challenge.
Trading ideas with the Relative Vigor Index (RVI) Indicator For MT5
The RVI is specially designed to focus on the volatile asset. So, choosing an asset that has low volatility won’t give you a satisfying result. The signal lines in the RVI curve will show relatively flat reading and it will be very hard to ascertain the proper trade setup from such market condition. Chose an asset that has a daily pip movement of more than 50 pips for the last 3 days.
You can day so by using the daily chart and the cross-hair. No special indicator is required as you can measure the distance from the high and low of the candlestick with the cross-hair tools. And regarding the execution of the trades, it needs to be done during the active hours. That means you have to consider the different sessions based on the selection of the asset.
Relative Vigor Index (RVI) Indicator For MT5 - Buy Entries
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For the long trade, we will follow the hard way. That means the reversal trading technique will be discussed in this segment. Usually, investors fail to decipher the secrets of the professional by which they open long orders at the bottom of the downtrend.
With the RVI indicator in hand, we will simply deploy the double bottom pattern. The second bottom is the place where we should be searching for a bullish price pattern. The RVI indicator curve should be should show a bullish cross at the bottom segment. That means the pale green line will cross over the red line showing a shift in the trend. Open the long trade without thinking twice.
The stop loss should be placed below the first bottom. In case you want to rely on tight SL, set it below the bullish PA pattern. The take profit for the trade setup is determined by analyzing the SL price. It should be set in such a way so that the minimum RR ratio is 1:3 for the trade. In some cases, you will get a better RR ratio.
Relative Vigor Index (RVI) Indicator For MT5 - Sell Entries
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For the sell entries, the traditional method will be entertained. We have to find a strong downtrend so that we can open the short with the trend. When the trend is strong it is a hard task to ride the short order. A consolidation pattern is required so that we can set up a tight stop loss with this RVI method.
As you spot the consolidation in the price, it’s time to look at the potential breakout. When the breakout takes place, the RVI line should be below the 0 lines. The green line will cross below the red line showing the sellers have regained their momentum for the asset. The consolidation zone will be the strong resistance and the stop loss is placed 4 pips above that zone.
The best part of using the consolidation zone is to rely on the strong breakout. You no longer have to depend on the PA pattern which can be a great relief for many newcomers. But remember, the risk factors in the trades should be limited. Just because you have a great system doesn’t mean you should be opening high-risk trade.
Relative Vigor Index (RVI) Indicator For MT5 - Conclusion
The RVI indicator is a powerful indicator. When you couple this indicator with other standard tools, you can get a very powerful setup. You can create your strategy files without getting into trouble. Before you transform this indicator into a part of an existing system, know how it syncs.
It might not sync well with the tools that repaint its value. Finding the non-repainting indicator should be the biggest challenge for using this method. But remember, everything in the investment world is subject to change. You do have the options to change different settings of the RVI even though the default settings works perfectly fine.
Get used to the moving average as the RVI integrates super well with the 55 or the 100 periods moving average. But these things need to be tested in the different instruments before you take the indicator that is synced with the other tools. Remember not to get excited by learning to use this amazing indicator. You still have to face losses and there is no system to avoid losing trades. So, stick to the order of money management to keep the funds safe.
