Range Expansion Index for Overbought and Oversold Signals

Summary

The Range Expansion Index (REI) is a relative oscillator attributed to Tom DeMark. It measures the pace of price changes on a scale from -100 to +100 and is intended to identify overbought or oversold conditions when price action shows weakness or strength. The description presents it as designed to suppress signals during range-bound markets and focus on more pronounced peaks and troughs.

The listed default lookback is 8 periods; changing it trades off signal frequency against precision, and the document advises retaining the default. Alerts can be configured around crossings of the +60 and -60 levels, with options for pop-up, email, or push notifications. Alerts may reference the last completed candle or the still-forming candle. No performance testing, assets, or timeframe are specified, so the indicator’s claimed filtering behavior and threshold usefulness are not substantiated here; users would need to test it in their own market and execution context.

Key ideas

• REI is an oscillator ranging from -100 to +100 that is intended to flag overbought and oversold conditions.
• Its design aims to limit signals in range-bound markets and emphasize significant price extremes.
• The stated default lookback is 8 periods, with changes affecting signal frequency and precision.
• Alerts can be set for crossings of +60 and -60 and can use completed or unfinished candles.
• The document provides no performance evidence or guidance on asset and timeframe selection.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.