Relative Vigor Index Forex Trading Strategy

The Relative Vigor Index forex trading strategy is a trend following strategy with complete entry and exit trading rules.

The strategy consists of a group of 3 indicators that have been fine tuned to yield consistent profits.

The Relative Vigor Index and price-emas are both oscillators that complement each other in spotting price exhaustion, while the r_Gator is a visually appealing trend tool.

Chart Setup

MetaTrader4 Indicators: r_Gator.ex4 (Inputs Variable Modified; period=10, period_1=16, period_2=26, bars=300000), price-emas.ex4 (Default Setting), Relative Vigor Index.ex4 (Parameters Modified; Period=24)

Preferred Time Frame(s): 1-Minute, 5-Minute, 15-Minute, 30-Minute, 1-Hour, 4-Hour, 1-Day

Recommended Trading Sessions: Any

Currency Pairs: Any pair

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Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Initiate a buy entry if the following indicator or chart pattern gets displayed:

  1. If the blue line of the r_Gator.ex4 custom indicator intersects its red and green lines bottom up, with price trading somewhat above, a bullish trend is said to be looming i.e. a trigger to go long on the designated currency pair.
  2. If the green line of the price-emas.ex4 custom indicator breaks above the 0.00 level as depicted on Fig. 1.0, price is said to be pushed to the upside i.e. a trigger to go long on the selected forex pair.
  3. If the green line of the Relative Vigor Index MT4 indicator breaks and hovers above the 0.00 level as seen on Fig. 1.0, the sentiment in the market is said to be bullish, as such a buy alert will suffice.

Stop Loss for Buy Entry: Place stop loss 5 pips below short-term support.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit if the following rules or conditions takes precedence:

  1. If price closes below the blue line of the r_Gator.ex4 custom indicator as illustrated on Fig. 1.0, an exit or take profit is advised.
  2. If the green line of the price-emas.ex4 custom indicator falls below the 0.00 level, an exit or take profit is recommended.
  3. If the green line of the Relative Vigor Index MT4 indicator breaks below the 0.00 level while a buy signal is ongoing, an exit or take profit is advised.

Sell Entry Rules

Enter a sell order if the following holds true:

  1. If the blue line of the r_Gator.ex4 custom indicator intersects its red and green lines top downward, with price trading slightly below, a bearish trend is said to be imminent i.e. a trigger to go short on the designated forex pair.
  2. If the green line of the price-emas.ex4 custom indicator dips below the 0.00 level as shown on Fig. 1.1, price is said to be driven lower i.e. a trigger to go short on the forex pair of interest.
  3. If the green line of the Relative Vigor Index MT4 indicator breaks and hovers below the 0.00 level as depicted on Fig. 1.1, the sentiment in the market is said to be bearish, as such a sell alert will do.

Stop Loss for Sell Entry: Place stop loss 5 pips above short-term resistance.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following takes center stage:

  1. If price closes above the blue line of the r_Gator.ex4 custom indicator (refer to Fig. 1.1), an exit or take profit is directed.
  2. If the green line of the price-emas.ex4 custom indicator rises above the 0.00 level, an exit or take profit is advised.
  3. If the green line of the Relative Vigor Index MT4 indicator breaks above the 0.00 level while a sell signal is running, an exit or take profit will do.

Sell Trade Example

Fig. 1.1

Free Download

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About The Trading Indicators

The r_Gator.ex4 is an indicator that takes after the Alligator MT4 indicator (since they show comparable values for the MA periods), but the r_gator only produces its signal earlier than the Alligator.

The Price-emas.ex4 is a custom indicator that is built on the EMA (10), EMA (50) and EMA (200), offering trader’s trend following capabilities.

The Relative Vigor Index technical indicator is a technical tool that gauges the conviction of a recent price action and the likelihood that it will continue.

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