Using the Range Expansion Index to Identify Price Extremes

Summary

The Range Expansion Index (REI) is described as a bounded oscillator developed by Tom DeMark. Its values range from -100 to +100, and it is intended to measure the pace of price changes while identifying potentially overbought or oversold conditions when price action shows weakness or strength. The indicator is presented as more selective than a continuously reactive oscillator: it seeks to stay subdued during range-bound trading and signal around more significant highs or lows.

The document lists an eight-period default and says increasing the period produces fewer, potentially more precise signals, while decreasing it produces more signals that may be less accurate. It also describes alerts around crossings of the +60 and -60 levels, with options for pop-up, email, and push notifications, and for using either the latest closed candle or the still-forming candle. These are indicator settings, not evidence of trading profitability. No formula, tested market, backtest, or guidance on entries, exits, or risk controls is supplied, so users would need to validate signals in their own context.

Key ideas

• REI is a bounded oscillator with values from -100 to +100.
• It aims to highlight significant price extremes while remaining quieter during range trading.
• The default lookback is eight periods, and changing it trades signal frequency against stated precision.
• Alerts are associated with crossings of +60 and -60 and can use closed or unfinished candles.
• The document provides no performance tests or complete trading rules.

Tags

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