Rolling Rally Gains and Adjusted Losses for Price Targets

Summary

This indicator compares each bar’s high and low with the highest high and lowest low over a configurable lookback period, defaulting to 30 bars. It plots the gain from the period low to the current high and an adjusted loss derived from the period high to the current low. The author presents these readings as a systematic way to compare prior rallies and selloffs and identify possible resistance or target levels; an example describes using past rally percentages to frame a potential target.

The loss adjustment reflects the asymmetry of percentage changes: a decline requires a larger percentage rise to recover. This makes adjusted losses more visually comparable with gains, but the adjusted value is not the actual loss and can be substantially misleading during unusually large moves. The indicator was designed for bull markets; in bear markets, the author suggests switching which gain and loss plots are displayed. The example is exploratory, not evidence of predictive performance, and the tool does not establish that historical percentage moves will repeat.

Key ideas

• The lookback length determines the window used to find the period high and low.
• The gain reading measures the current high relative to the lookback low.
• The loss reading measures the current low relative to the lookback high, with an optional adjustment for visual comparison.
• Adjusted losses can differ materially from actual losses during unusually directional moves.
• The author presents historical rally magnitudes as exploratory reference points for targets, not validated forecasts.

Tags

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