Tutorial DeMark (c) Indicators
The foundation and most famous of the DeMark (c) indicators are the setups and countdowns, the “9s” and the “13s” you see discussed on tv.
The “13s”, Sequential and Combo, tries to identify points of exhaustion in the market. This occurs when everybody has bought or sold and the market then should reverse from a lack of buyers or sellers. We always say “Markets top on good news and bottoms on bad” and not the other way around. When sentiment is bearish, markets reverse higher and vice versa.
When looking at a market from a DeMark perspective, we try to conclude if the market is trending or not. This is done by identifying a “price flip” which is a close or sell that is below or above the close 4 bars ago.
The price flip is the first part of a Buy- or Sellsetup. A buysetup is a move lower that leads to a buy and vice versa. There is difference in how they work but they both apply the same rules.
In order to record a Buysetup (here we use a Buysetup as example) the first step is a Bearish price flip.
The Bearish price flip is a close below the close 4 bars ago and an 1 appears below the pricebar. When this occurs the market might be starting to trend. However, in order to get to a Buysetup, this has to occur for 9 consecutive days, else it is cancelled and a Setupcount starts the other way, into a Sellsetup.
A sequence of 9 lower closes than the bar 4 ago must then be seen and the buysetup is recorded. At any point it closes above the close 4 bars ago the count is cancelled and Bullish price flip is seen and a 1 appears above the price bar for the Sellsetup.
When the count goes to 9, it is finished and the Buysetup has recorded. This is crucial to our work.
Read more at https://www.northernraven.com/
Let´s get trading!
No comments:
Post a Comment