Calculating the Ehlers Relative Vigor Index and Signal Line
Summary
The Ehlers Relative Vigor Index (ERVI) is a price oscillator based on the relationship between candle bodies and trading ranges. Its calculation first forms weighted averages over four bars: candle body changes contribute to the numerator, while high-to-low ranges contribute to the denominator. Simple moving averages over the selected period are then applied to both series, and their ratio gives the RVI.
A signal line smooths the RVI using another weighted four-bar average. The document identifies the period as the sole input and provides the calculation definitions, but offers no interpretation rules, example signals, market tests, or performance results. It is therefore a concise indicator specification rather than a complete trading strategy; users would need to determine how to interpret readings and validate them for their market and timeframe.
Key ideas
- ERVI compares smoothed candle body movement with smoothed high-to-low ranges.
- The calculation uses a configurable period for its simple moving averages.
- A weighted four-bar average of RVI values forms the signal line.
- The description provides formulas but no signal rules or evidence of trading performance.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.