Rex Oscillator: Bar Value, Smoothing, and Reversal Signals
Summary
The Rex oscillator uses each bar’s close relative to its open, high, and low to estimate directional strength. Its True Value of a Bar combines these prices; the document says a close direction that conflicts with the bar value may suggest strength building against the prevailing trend. Rex smooths this value with a selectable moving average, and a second moving average serves as a signal line.
The proposed interpretation is that Rex turning positive during a bearish trend may indicate a reversal, while Rex turning negative during a bull trend may signal downside reversal. The document provides a formula and sample indicator settings, but no market, timeframe, backtest, or performance evidence. The signal is therefore a description of an indicator heuristic rather than demonstrated predictive results; traders would need to define trend conditions and test the signal’s reliability, lag, and sensitivity to smoothing choices.
Key ideas
- The True Value of a Bar combines the close with the bar’s open, high, and low.
- Rex is a moving average of the bar value, with several smoothing methods available.
- A separate moving average of Rex is presented as a signal line.
- A change in Rex direction against the prevailing trend is proposed as a possible reversal signal.
- The document provides no empirical test of the indicator’s predictive performance.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.