What is the Relative Vigor Index primarily used for?

The Relative Vigor Index (RVI) is primarily used as a smoothed momentum indicator. It assesses the strength of a trend by comparing the closing price of a security to its price range over a specific period. This metric helps traders determine whether a security is likely to continue its current trend or to reverse, based on the relationship between the closing price and the opening price relative to the high and low over that period.

RVI is particularly useful in generating signals for potential buy or sell opportunities by indicating whether increased momentum is consistent with a price rise or fall. The smoothing aspect of the RVI helps to reduce noise in price movements, allowing traders to identify more clearly defined trends and potential reversals.

In contrast, while the other options relate to analysis techniques, they do not capture the primary focus of the RVI. The measurement of trading volume, prediction of market crashes, and analysis of price changes over multiple sessions do not align with the core functionality of the RVI, which zeroes in on momentum characteristics specifically.