How do I use Relative Vigor Index (RVI) to create a forex trading strategy?

Other technical indicators are used to confirm trading signals given by the RVI. You have set short take profit for scalping trading purpose. The next period, we see the MACD perform a bullish crossover — our second signal. The red line is the "trigger line", because it provides trade signals when it crosses above or below the green line. These readings of The strategies we will cover in the next section of this article will show you how to reduce the number of false signals so prevalent in the market.

The Relative Vigor Index (RVI) Forex Trading Strategy is based on a lesser know forex indicator called the Relative Vigor Index or the RVI.. The RVI indicator is an indicator that is not so popular as its cousins, the Stochastic .

FOREX FUNCTION MEMBERSHIP

When Stochastic makes crossover on overbought area at 80 level, then you have to wait for confirmation from RVI indicator. When RVI makes crossover in the down direction at high area, then you will get sell signal confirmation. H1, H4 is suitable.

You can use on other time frame. Take profit and Stop loss: You can set pips take profit on major pairs. For cross pairs, you can set pips take profit. You can close your buy trade when stochastic and RVI comes to overbought area.

Similarly, you can close your sell order when stochastic and RVI downs to oversold area. You can set stop loss below recent support for buy entry. For sell entry, you can set stop loss above recent resistance.

After getting confirmation from both indicators, you have to take entry. You also need to avoid this Stochastic and RVI strategy at the news time. You have to follow money management theory for following this strategy. Try this Stochastic and RVI strategy on your demo account. If you are satisfied with this strategy, then you can use this on your real account. Therefore, the two bands form a corridor, which is split on two halves by the period SMA.

In this trading strategy, we need two signals in order to enter the market. The first one comes from the RVI indicator being overbought or oversold. Whenever we get the cross, we open a position accordingly. The image above shows the minute chart of Apple for October , In this image, we see that the two signals we need from this trading strategy come at once. The RVI shows overbought market and its lines cross in a bearish direction. At the same time, the price breaks the period SMA of the Bollinger Bands in a bearish direction, which is our short trigger.

We go short and the price begins to ride the lower bands, which is great for our short position. Twenty-two hours later, we see the price of Apple breaking the period SMA of the Bollinger Bands in a bullish direction.

Please note while this example is of an overnight position, we at Tradingsim do not believe in holding positions overnight, as we are day traders. If you are a swing trader, then of course the above example would fit within your trading time frame.

As a trader, avoiding over doing it is always a great idea. Therefore, out of the 5 strategies, I would have to say the RVI with two moving averages is the best for day trading. The moving averages allow you to assess the price action while the RVI gives you an indication of oversold and overbought conditions. This way you need actual price action to confirm the signal from the RVI oscillator. Free Trial Log In. RVI and Stochastics Strategy.

Al Hill is one of the co-founders of Tradingsim. He has over 18 years of day trading experience in both the U. On a daily basis Al applies his deep skills in systems integration and design strategy to develop features to help retail traders become profitable.

When Al is not working on Tradingsim, he can be found spending time with family and friends. See How Tradingsim Works.

Recent Posts

A forex trading strategy designed to make maximum profits from a long-term uptrend can be created using the Relative Vigor Index (RVI) in conjunction with other technical indicators. The RVI. This is a basic RVI trading strategy. This strategy can be used in short time for scalping purpose. Beginners can follow this simple forex strategy. You can . Stochastic and RVI (Relative Vigor Index) both indicators measure overbought and oversold area of the market movement. From this trading strategy, you can take entry from overbought and oversold area. From those.