The Range Action Verification Index (RAVI) indicator for MetaTrader4 was developed by Tushar Chande in the late 1990s, in a bid to determine the strength of a trend. The RAVI indicator computes the percentage difference between the most recent prices and older prices.
The short Simple Moving Average are used to represent the most recent prices, while the long Simple Moving Average are used in depicting the longer time frame. The original creator of the Range Action Verification Index (RAVI) indicator recommends plus-minus 0.3% or 0.1% (subject on the market) as the indicator’s information lines.
The RAVI indicator deploys two simple moving averages in its calculation and deploys the absolute value of result making sure all its values are positive. The “0.3” level is an information line for this indicator and if by any means the indicator surges above the “0.3” level, it is assumed that price is in a rising trend. However, if the FAVI indicator pushes below the “-0.3” level, price is said to be in a downward trend.
As long as the RAVI histogram continues to rise, the trend is said to be continuing. It is assumed that the trend has ended as soon as the RAVI indicator begins to turn back to the “0” line. If the indicator recoils without breaking the “0” level, then we can assume that the current trend is being renewed.
The colors of the histogram are also important, as the green colored histogram are indicative of a bullish trend, while the red colored histogram signify a bearish trend. The grey colored histogram defines regions of uncertainty. The colors can be tweaked to suit the trader’s preference.
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: chart window indicator
Customization options: Variable (Period1, Period2), Colors, width & Style.
Time frames: 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month