Looking for the Divergences
One more feature of Relative Vigor Index in binary options is to search for the divergences, value is forming, when put into comparison with oscillator. A bullish divergence is in all cases taken into consideration while the value is forming two distinctive lows in a row as oscillator is not acknowledging these lows. In this situation, the calls are preferred with a possibility to edit the expiry period according to the period, where the oscillator is located.
This is also true for a bearish divergence, because the value is forming 2 higher highs in a row, however after that the oscillator is not succeeding to form the 2nd one (it is known that it is not acknowledging the actions of value). In this situation the puts are preferred with the corresponding expiry period.
Nevertheless, though the value is demonstrating the divergence, when it is possible to commit the deal or, saying it in trading language, what is the appropriate striking value?
SL is providing it, when intercrossing the basic MA in the lower part by indicating bearish situation, where puts are being traded, and when it is intercrossing the MA in the upper part, it is indicating the bullish situation, where calls have to be operated.
It is possible to find the RVI in the Metatrader by clicking the „Insert”, after that go to „Indices”, and here look for the RVI in the directory of the „Oscillators” below its closest analogue – the RSI. Selecting the indicator and pushing OK button will divide the basic window into the one which is basic with the value demonstrated, and a small one with the oscillator dynamics showed.
It is also necessary to add that the RVI is not just applied traditionally, but also as a tendency index. It is really advised not to take into account a contrarian deal while the SL is not intercrossing the MA in the upper or lower part due to the fact that in most cases it is operating in this way following the placement of a high or low.
The Application of Signal Line
In other words, Signal Line means operating with RVI and, in some sort, this is the basic distinction between the RVI and RSI.
Sure, the RVI, as every oscillator, is extremely influenced by the type of considered time frame, because following various regarded candles it is able to cause flat oscillator and, thus, two intercrossings down and up, the basic MA, and the fast growth, which might emerge, will not be noticeable or will be way more complicated to explain.
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