Range Expansion Index Indicator MT4

This is a free, instant-download MT4 build of Tom DeMark’s Range Expansion Index (REI), a bounded oscillator designed to flag when a market’s range is genuinely expanding versus quietly grinding. Because it’s a DeMark tool built on conditional logic rather than a simple average, it’s worth understanding the actual rule set before you read the plot as a signal.

What It Actually Calculates

REI is built from two rolling sums over an REI_Period-length window (default 8 bars), computed fresh for each bar going back through history:

• SubValue(i) — takes diff1 = High[i] - High[i+2] and diff2 = Low[i] - Low[i+2], then multiplies that sum by two conditional “zero” flags. The first flag requires that the bar two bars back closed below the closes seven and eight bars back, and that the current bar’s high is below the highs five and six bars back. The second flag runs the mirror-image test using lows. If either condition fails, the whole term is zeroed out for that bar — this is DeMark’s way of only crediting range expansion in the correct directional context.
• AbsDailyValue(i) — the unconditional, always-positive version: |High[i]-High[i+2]| + |Low[i]-Low[i+2]|.

The indicator sums SubValue and AbsDailyValue independently across the whole REI_Period window, then divides: REI = (sum of SubValue / sum of AbsDailyValue) * 100. Because SubValue can come out positive, negative, or zeroed, the ratio oscillates between roughly -100 and +100, plotted in a separate window with reference levels drawn at +60 and -60.

How to Read the Chart

Per the original DeMark methodology referenced in the indicator’s own comment block: a push above +60 followed by a drop back below +60 signals price weakness (a potential top). A push below -60 followed by a rise back above -60 signals price strength (a potential bottom). The key word is the round trip — DeMark’s method isn’t just “above 60 is overbought,” it’s the crossing back through the level that constitutes the actual signal.

Inputs

• REI_Period (default 8) — the number of bars used for both the SubValue and AbsDailyValue rolling sums. Smaller values make the oscillator faster and noisier; larger values smooth it out and delay signals.

Why the Conditional Gating Matters

The part that separates REI from a generic range indicator is the pair of zero-out flags inside SubValue(). On any given bar, if the bar two periods back doesn’t qualify as a genuine local extreme relative to bars five, six, seven, and eight periods back, that bar’s contribution to the bullish or bearish sum is multiplied by zero and effectively ignored — even if the raw high/low difference was large. This is what DeMark meant by “range expansion” rather than simple range: a big high-low swing only counts toward REI if it’s happening in a context where the market has actually broken out of its recent structure, not just printed a wide, directionless bar. It’s also why the two num_zero flags are calculated completely independently for the bullish and bearish sides of the formula — a single bar can contribute to neither, one, or (in edge cases) both sides of the SubValue sum, depending on which of the two directional tests it satisfies.

The indicator also sets SetIndexDrawBegin(0, REI_Period + 8), meaning it deliberately withholds plotting until enough history exists to fill the calculation’s full 8-bar lookback offsets (High/Low at i+8) on top of the REI_Period window itself.

Repaint Behavior

REI is non-repainting. The code follows the standard incremental MT4 pattern — it checks IndicatorCounted() and only recalculates bars that haven’t been processed yet, rather than rewriting the whole buffer on every tick. More importantly, both SubValue and AbsDailyValue only ever reference the bar being evaluated plus older bars (offsets of +2, +5, +6, +7, and +8 — all pointing further into the past, never forward). Since none of the inputs to the formula depend on bars that haven’t closed yet, a bar’s REI value is fixed the moment that bar closes and its lookback offsets are all historical.

Limitations

• The oscillator needs REI_Period + 8 bars of prior history before it starts plotting at all, so it will show gaps at the very start of thin history or brand-new symbols.
• The signal DeMark describes (cross above/below 60, then cross back) requires you to actually track the crossing sequence yourself — the indicator plots the raw REI value only, with no built-in arrows or alerts for the confirmed cross-back event.
• Like any range/momentum oscillator, REI can stay pinned near its extremes for extended periods in a strongly trending market, so treat +60/-60 as thresholds to watch for a reversal in the confirming pattern, not as a mechanical fade signal on their own.
• The indicator plots a single line with no separate arrows, colors, or on-chart labels marking a completed cross-back signal — you’re reading the raw ratio against the fixed +60/-60 reference levels yourself, which means it pairs well with a simple visual scan but has no built-in alert for the DeMark-specific trigger condition.