DeMark Indicators explained
DeMark indicators attempts to identify ranging markets and momentum moves out of ranges and also finding points of exhaustion.
Initially, buy- and sellsetups and countdowns, the “9s” and “13s” are identified. These are different counts that records as the markets moves and are then used to find possibel ————–
Most people look at a chart to find a 13 and then act on it. That is not how it works. Everything has to be taken into account: supports, resistances, trendlines and also finding out the market structure. To be able to identify where in the cycle the market currently is in, we need to determine what wave the market is in.
The markets mainly moves in 5 and 3 waves where a 5 wave move is corrected by a 3 wave move in the opposite way.
DeMark waves should not be confused with Elliot waves although the foundation is the same.
A big part of the work is to identity the levels of supports and resistances. But perhaps more important, to determine whether or not the breaks are false, so called qualified or non-qualified breaks. False breaks are important to find as they tend to lead to violent contra moves and the qualified accelerates with the break.
These supports and resistances consists of TDST – the main support/resistance level as it sets up the trend, trendlines as markets trend and also momentum projections.
At the end, the DeMark indicators are applied to different timeframes: daily, weekly and monthly charts and then combined to get the full picture of the different assets.
Finally and maybe the most important thing to consider, are the signals the markets send when they do not react to the signals.
All of this we incorporate into our work to provide clients a good tool to make decisions.
DeMark indicators – (trademark)
DeMark indicators were developed by Tom Demark in the 80s. They intend to catch point of exhaustions with support and resistance levels based on counts of bars (daily, weekly, montly i.e) and specific rules. The DeMark indicators may be applied to stocks, equity markets, bonds, currencies and commodities.
DeMark indicators offer a way to identify whether the market is in a range or if we have a momentum move and where it should end up.
We also take into account that the markets move in 5 and 3 waves which allows to better identify the impulsive 3rd wave where most partipicants are caught on the wrong foot expecting a market reversal.
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