What is RVI?
The Relative Volatility Index has the same shape as the RSI, but puts volatility where RSI puts price change. Each bar it measures the standard deviation of recent closes and assigns that figure to the up side if the close rose, or to the down side if it did not. Both sides are smoothed, and RVI is the up side's share of the total, from 0 to 100, with a dashed line at 50.
A reading near 100 does not mean price has risen a lot. It means the volatility of recent bars arrived mostly on bars that closed up. RVI does not measure the size of the move, and it does not predict direction.
How to use RVI
- Above 50. More of the recent volatility came on up bars than on down bars. The active, wide-swinging bars have been the rising ones.
- Below 50. More of the recent volatility came on down bars, including bars that closed unchanged.
- As a confirmation. RVI is often read alongside a trend or momentum signal, to check whether the volatility is on the same side as the move rather than as a trigger on its own.
- The usual misreading. A high RVI is about where volatility occurred, not how far price went. A slow grind higher on quiet bars can leave RVI near 50.
These are ways to read the line, not entry signals on their own.
Settings
| Setting | Default | What it changes |
|---|---|---|
| Length | 10 | Bars in the standard deviation measured on each bar. Shorter makes each bar's volatility figure more reactive; longer makes it steadier. Minimum 1. |
| Smoothing | 14 | Length of the EMA applied to the up and down sides. Shorter makes RVI swing faster and more often; longer makes it smoother and later. Minimum 1. |
| Source | Close | Which price each bar contributes, both to the standard deviation and to deciding whether the bar was up or down. Open, high, low and the averaged sources such as hl2 and hlc3 are also available. |
Adjust the volatility window, the smoothing and the price source in the indicator settings.
Calculation
Each bar, the indicator measures the standard deviation of recent closes and books it to the up or the down side, depending on whether the close rose:
sd = standard deviation of the last 10 closes
up = sd if close > previous close, else 0
down = sd if close <= previous close, else 0
upper = EMA(up, 14)
lower = EMA(down, 14)
RVI = 100 * upper / (upper + lower)A bar whose close is unchanged counts as a down bar. Each bar contributes its standard deviation to exactly one side, so the two sides together add up to a smoothed standard deviation, and RVI is the up side's share of it.
Each EMA uses alpha = 2 / (14 + 1) and starts from the simple average of the first 14 consecutive bars that have a value. The standard deviation itself needs 10 bars first, so the first reading appears a little after bar 20 at the defaults. A dashed reference line is drawn at 50. No overbought or oversold levels are drawn.
Limitations
- It is easy to misread. RVI shows where volatility occurred, not how much price moved. Treating it as a price-strength gauge like RSI leads to the wrong conclusions.
- Unchanged bars count as down. On markets or timeframes with many flat closes, that tilts the reading below 50.
- It lags. Two layers of averaging, a 10-bar standard deviation and a 14-bar EMA, mean the line responds after the change has happened.
- The live candle moves. The current bar can switch between the up and down side as its close crosses the previous close, so its value can jump until that bar closes.
- It is not a strategy. It gives a reading, not an entry, exit, sizing or risk management.
Frequently asked questions
The Relative Volatility Index is an oscillator from 0 to 100 that shows what share of recent volatility came on up bars. It is built like the RSI, but instead of averaging the size of up and down moves it averages the standard deviation recorded on up and down bars.
Above 50, more of the recent volatility arrived on bars that closed up; below 50, more arrived on bars that closed down or unchanged. It is commonly used to confirm a signal from another indicator, checking that the volatility is on the side of the move, rather than as a signal by itself.
Yes. The indicator declares three inputs: Length, the standard deviation window, default 10 with a minimum of 1; Smoothing, the EMA length, default 14 with a minimum of 1; and Source, default close. Open the indicator's settings on the chart to change them.
Values on bars that have already closed are not revised. The current candle's RVI moves while that candle is live, and can jump as its close crosses the previous close, then settles when the candle closes. The smoothing needs a starting point, so loading older history recalculates it and values near the very start of the loaded range can shift.
RSI compares the average size of up moves with the average size of down moves, so it measures the balance of price change. RVI replaces the size of each move with the standard deviation on that bar, so it measures where volatility occurred. The two can disagree, for example during a quiet climb.
Use the Add to chart button at the top of this page. It opens BTC/USDT on Binance in the Altrady Charts terminal with the built-in Relative Volatility Index already applied. On any other market, open the indicator picker on the chart and choose Relative Volatility Index from the Volatility group.