Q: Parameters

| Parameter | Default | Description | |-----------|---------|-------------| | Period | 10 | Number of candles for stddev window and smoothing |

Q: Tips

- RVI is best used as a **confirmation indicator** alongside trend-following signals - Unlike RSI, RVI doesn't measure price direction but **volatility direction** - A flat market with no volatility will show RVI near 50 - Works well on all timeframes; lower timeframes may produce more noise - Consider using period 10 for short-term and 20 for long-term analysis

Question 1

What is RVI?

Accepted Answer

The Relative Volatility Index (RVI) measures the **direction of volatility** rather than the direction of price. It uses standard deviations of gains and losses instead of raw price changes, oscillating between 0 and 100.

Question 2

How it works

Accepted Answer

1. Calculate price changes between consecutive candles 2. For each rolling window of `period` changes, compute the standard deviation of gains and the standard deviation of losses separately 3. Smooth the stddev values using Wilder's method (same as RSI) 4. Calculate RVI: ``` Upper = SmoothedStdDev(gains, period) Lower = SmoothedStdDev(losses, period) RVI = 100 × Upper / (Upper + Lower) ```

Question 3

Key levels

Accepted Answer

- **Above 50** — Upward volatility dominates. Confirms bullish momentum. - **Below 50** — Downward volatility dominates. Confirms bearish momentum. - **Above 60** — Strong bullish volatility signal - **Below 40** — Strong bearish volatility signal

Question 4

Trend confirmation

Accepted Answer

- **Buy signal:** RVI crosses above 50 — volatility favors upside moves - **Sell signal:** RVI crosses below 50 — volatility favors downside moves

Question 5

Divergence

Accepted Answer

- **Bullish divergence:** Price makes a lower low, but RVI makes a higher low - **Bearish divergence:** Price makes a higher high, but RVI makes a lower high

Question 6

Combined with RSI

Accepted Answer

- RVI > 50 + RSI > 50 — Strong bullish confirmation - RVI < 50 + RSI < 50 — Strong bearish confirmation

Question 7

Parameters

Accepted Answer

| Parameter | Default | Description | |-----------|---------|-------------| | Period | 10 | Number of candles for stddev window and smoothing |

Question 8

Tips

Accepted Answer

- RVI is best used as a **confirmation indicator** alongside trend-following signals - Unlike RSI, RVI doesn't measure price direction but **volatility direction** - A flat market with no volatility will show RVI near 50 - Works well on all timeframes; lower timeframes may produce more noise - Consider using period 10 for short-term and 20 for long-term analysis