Smoothed Relative Volatility Index W/2 EMA
This script is a reboot of the relative volatility index that adds a smoothing factor to the indicator which eliminates a significant amount of the noise/signal ratio.
The relative volatility index is defined as the following from tradingism.com:
"Relative Volatility Index Definition
The relative volatility index (RVI) was developed by Donald Dorsey, who truly understood that an indicator is not the holy grail of trading. The RVI is identical to the relative strength index , except it measures the standard deviation of high and low prices over a defined range of periods. The RVI can range from 0 to 100 and unlike many indicators that measure price movement, the RVI does an exceptional job of measuring market strength.
Purpose of Relative Volatility Index
The relative volatility index was designed not as a standalone indicator, but as a confirmation for trading signals. The RVI is most widely used in conjunction with moving average crossover signals."
The rules of the RVI are to sell below the 50 line and buy above the 50 line. The 2 EMA's I added act as a "dynamic" 50 line and also provide crossover signals.
The smoothed relative volatility index included, is accompanied by the original relative volatility index as an option with its own EMA's.
The smoothing factor provides divergence signals and/or an added layer of confirmation from other indicators.
On the chart above is the smoothed relative volatility index above the original set to the same time period for comparison.
The relative volatility index is defined as the following from tradingism.com:
"Relative Volatility Index Definition
The relative volatility index (RVI) was developed by Donald Dorsey, who truly understood that an indicator is not the holy grail of trading. The RVI is identical to the relative strength index , except it measures the standard deviation of high and low prices over a defined range of periods. The RVI can range from 0 to 100 and unlike many indicators that measure price movement, the RVI does an exceptional job of measuring market strength.
Purpose of Relative Volatility Index
The relative volatility index was designed not as a standalone indicator, but as a confirmation for trading signals. The RVI is most widely used in conjunction with moving average crossover signals."
The rules of the RVI are to sell below the 50 line and buy above the 50 line. The 2 EMA's I added act as a "dynamic" 50 line and also provide crossover signals.
The smoothed relative volatility index included, is accompanied by the original relative volatility index as an option with its own EMA's.
The smoothing factor provides divergence signals and/or an added layer of confirmation from other indicators.
On the chart above is the smoothed relative volatility index above the original set to the same time period for comparison.
Release Notes:
The updates from I conjured up while asleep include a Bollinger band around the smoothed relative volatility index. Because what's better than one volatility indicator......
The Bollinger band is on a standard-setting. 20 period MA and 2 standard deviations for bands. There's another added feature as well, which alerts the user when the SRVI crosses over the upper or lower Bollinger band. The alert is a grey vertical line at the crossing point.
ENJOY!
The Bollinger band is on a standard-setting. 20 period MA and 2 standard deviations for bands. There's another added feature as well, which alerts the user when the SRVI crosses over the upper or lower Bollinger band. The alert is a grey vertical line at the crossing point.
ENJOY!