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Earnforex
The Range Expansion Index (REI) is a powerful oscillator that helps traders gauge the rate at which prices are changing. It’s especially useful for identifying overbought and oversold conditions when price action shows signs of weakness or strength. Developed by the renowned Thomas DeMark, this indicator is detailed in his book, "The New Science of Technical Analysis".
The REI values range from -100 to +100. What makes this oscillator stand out is its ability to remain neutral during sideways markets, only indicating trends when significant highs or lows are reached.
Input Parameters:
- REI_Period (default value = 8) - This parameter determines the indicator's period. As the period increases, the number of signals tends to decrease, but they become more precise. Conversely, a decreasing period results in more signals, albeit with less accuracy.
According to Thomas DeMark, it’s best to stick with the default setting of 8. A buying opportunity arises when the price dips below -60 and then crosses back above this level. Conversely, a sell signal occurs when the price moves above 60 and then drops back down through that level.
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