Demark Trendline Trader

Demark Trendline Trader

The trendline on all traders draw their is two different traders in the same graph draw different trendlines. DeMark, in his book describes how to choose the right point through which passes a trendline (De Mark calls this line TD-lines, ie lines of the Thomas DeMark or Demark Trendline Trader) which are very important in the trade.

Demark Trendline Trader Pivots

At the beginning of his research DeMark came to the conclusion that the important reference price points are determined when the recorded maximum price above which prices were raised on the day immediately preceding this, as well as in following it, and vice versa when the price registered a minimum price below which the not dispensed on the day immediately preceding this.

These points are displayed on the chart, the red round point of reference points from the maxima of the blue control points to a minimum. In order not to be confused with fractals reference points DeMark on schedule and set fractals indicator (green). They are very similar but the pivot points DeMark filtered by several criteria.

Demark Trendline Trader - TrendLine

Once we found the anchor points must be through them draw a trendline. The downward trendline on the control points of the maxima is drawn so that the previous reference point should be higher than the last reference point, the upward way around.

For example, when you draw a descending line on the control points of the maxima, a reference point should be higher than the reference point 2 and vice versa in the ascending reference point 3 must be below the reference point 4.

Examples of drawing trendlines


Demark Trendline Trader - Signal to trade.

The signal to buy is when the price breaks downward trendline and the candle closes outside of the line.

A sell signal is when price breaks upward trendline and the candle closes outside of the trendline.


Demark Trendline Trader - Take profit.

There are three main methods of price discovery take profit (price projections).


1. The most aggressive and less accurate - with a buy signal is necessary to find the difference between the minimum price below the descending trendline and a point on a trendline directly above it and add the resulting amount to the price value at the point of breakthrough. When a sell signal is necessary to find the difference between the maximum price above the ascending trendline and a point on the trendline.

The green line is the distance between the farthest point from the line until the trendline and thus the distance between the point of breakthrough and take profit.


2. More conservative - if the price breaks upward downward trendline, we choose the minimum price the value is not below it, and the intraday low for the trendline. And so then this amount is added to the price break. When the price breaks down the rising trendline, then select an intraday high for the trendline, then this amount is added to the price break.

The green line is the distance between the lowest point inside the line until the trendline and thus the distance between the point of breakthrough and take profit.


3. The most conservative - with a buy signal is necessary to find the difference between the Demark Trendline and the closing price below that on the day when the minimum recorded value of intraday prices. That's closing price, and not the intraday low. When a sell signal is necessary to find the difference between the trendline and the closing price is higher than this on a day when the maximum recorded value of intraday prices.

The green line is the distance between the closing price, the minimum point of the candle inside the line until the Demark Trendline and thus the distance between the point of breakthrough and take profit.

Demark Trendline Trader - False breakouts.

1. Breakthrough occurred opposite direction of Demark Trendline, which set a new signal, contrary to the original. In this case, a new breakthrough, signaling the beginning of a new and opposite trend, becoming operational, replacing the previous one. Most often, the price trend will cease to exist this way, as calculated with the help of its price points are canceled.

Please note that we first got a buy signal when price breaks and candle closes above the descending Demark Trendline (red line), and then not having worked goal got the signal to sell when price breaks upward Demark Trendline (blue line). In this case, we will need to close the first position (buying) and enter the following is for sale.


2. The signal on the break of Demark Trendline from the beginning was the lodges * nym. Or unexpected event dramatically violated is * equilibrium of supply and demand, causing a reversal in prices immediately after the break.

This is a false breakout and a useful side. I have noticed myself after such a scenario, the price continues its upward movement.

Demark Trendline Trader Validity of price breaks.

1. If the closing price of the previous candle breakout lower than the previous candlestick, the probability of the truth of breakthrough increases.

Pay attention to the candle has two breakthrough bearish candlestick (black), with a downward Demark Trendline, the truth of breakthrough increases when the price closed below the second bearish candle first.


2. If the candle opens above the descending Demark Trendline or below the rising Demark Trendline, then the probability of the truth of breakthrough increases.
In this case, the price did not break through the Demark Trendline and immediately opened abroad.



By this strategy, basically have to sell a minimum of N1 (on the hour) schedule, but to filter out false breakdown, you can use a smaller timeframe. Who uses this method, which is a proposal, ask questions, answer with pleasure

Demark.rar This indicator itself draws reference points and the Demark Trendline, take profit level. Early use this indicator for finding the control points, and the Demark Trendline and take profit levels of paint yourself.


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