Retracement Pressure Index: Adaptive Pullback Timing Within a Trend

Summary

The Retracement Pressure Index (RPI) is a trend-context oscillator designed to assess whether a pullback may be mature enough to watch for a trend-direction re-entry. Instead of applying a fixed lookback, it counts consecutive counter-trend bars and adapts its measurement window to that retracement, subject to a minimum and a configurable maximum. Its score combines a dynamic stochastic position within the pullback range, retracement depth normalized by ATR, and counter-trend bar count, weighted at 40%, 40%, and 20% respectively.

The EMA slope supplies the trend context, while a signal line and configurable threshold provide visual cues. The author describes a high reading followed by a turn and signal-line crossover as a point to watch, not a standalone trade signal. The document emphasizes that the indicator cannot account for support, resistance, or market structure. It offers no test results; behavior depends on the instrument, timeframe, and parameter choices, and choppy short-timeframe price action may make the adaptive count less readable.

Key ideas

• The RPI adapts its lookback window to the consecutive bars moving against the EMA-defined trend.
• Its score combines pullback position, ATR-normalized depth, and counter-trend bar count.
• The components contribute 40%, 40%, and 20% to the composite score.
• A high reading and subsequent signal-line crossover are presented as a timing cue for review, not an automatic entry.
• The indicator does not account for support, resistance, or market structure, and the document reports no test results.

Tags

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