What type of moving average is used as a signal line in the Relative Vigor Index?

The Relative Vigor Index (RVI) uses a four-period triangular weighted moving average as its signal line. This choice is significant because the triangular weighted moving average gives more weight to the middle values, allowing for a smoother representation of price trends while being more responsive to recent price movements. This method effectively highlights momentum shifts and provides clearer signals for traders using the RVI.

The unique characteristics of the triangular weighted moving average allow it to filter out noise better than a simple moving average or other forms of moving averages. This enhanced filtering can help in identifying trends and potential reversals more effectively in the context of momentum indicators like the RVI.

While other options such as exponential and simple moving averages are commonly used in various technical indicators, they do not offer the same level of responsiveness and smoothing properties that the four-period triangular weighted moving average provides in this specific application.