Chande’s Range Action Verification Index

Written by Miroslav Marinov

Miroslav Marinov

Miroslav Marinov, a financial news editor at TradingPedia, is engaged with observing and reporting on the tendencies in the Foreign Exchange Market, as currently his focus is set on the major currencies of eight developed nations worldwide.

, | Updated: October 30, 2024

Developed by Tushar Chande, the Range Action Verification Index (RAVI) is used in order to help identify if the market is in a trend. The indicator shows the difference (in percentage) between the current prices and the past prices. Two key lines are recommended by Chande for the RAVI – 3% or 1% in dependence on the market.

A bull trend begins, when the RAVI crosses the 3% key line from bottom-up. The bull trend is considered as active as long as the indicator line moves up.

A bear trend begins, when the RAVI crosses the 1% key line from top to the downside. The bear trend is considered as active as long as the indicator line moves down.

In case the RAVI line turns back to zero, this is an indication that the trend has come to an end and the market is now in a trading range.

In case the RAVI line turns back again, but does not enter the area between the two key lines, this is an indication that the trend has resumed.

Chart Source: VT Trader