The cornerstone of DeMark’s work is the indicator. It is designed to identify when a trend has reached its logical conclusion and is ripe for a counter-trend reversal. The TD Sequential operates in two distinct phases: the TD Setup and the TD Countdown . 1. The TD Setup (9-Count)
Before diving into indicators, it is necessary to understand the mind that created them. Tom DeMark's career began over 50 years ago, managing a multi-billion-dollar pension fund where he was tasked with solving the industry's biggest pain point: .
This guide serves as a deep-dive into the core concepts of DeMark’s 1997 classic, exploring the precise methodologies that professional traders have sought after for decades. We will dissect the mechanics of his two most powerful tools—the TD Sequential and the TD Combo—and examine how modern traders continue to utilize DeMark's framework to identify trend exhaustion and pinpoint market turning points with surgical accuracy. The cornerstone of DeMark’s work is the indicator
Drawn by connecting specific market troughs (TD Demand Points) where the low of a bar is lower than both the preceding and succeeding bars.
Once a perfect 9-count is achieved, the market is considered overextended. Frequently, a brief pause or a minor reversal occurs immediately following a completed Setup. 2. The TD Countdown (13-Count) This guide serves as a deep-dive into the
The book is not just for reading; it is a blueprint for action . Modern technology has made DeMark's strategies more accessible than ever.
Requires a minimum of 9 consecutive close prices, each lower than the close price 4 bars earlier. Unlike Fibonacci retracements
The Philosophy of DeMark Indicators: Anticipation over Reaction
Because these are counter-trend tools, entering a trade on a Buy Setup means buying while the market is actively falling. If a market enters an irrational, hyper-extended trend, the indicator can produce consecutive "extensions," leading to losses if stops are not used.
These are objective, mathematical methods used to calculate potential price projections when a market retraces from a high or low. Unlike Fibonacci retracements, which are set percentages, DeMark’s retracements are based on specific price relationships. 5. TD Moving Averages
: Requires nine consecutive closes higher (for a sell setup) or lower (for a buy setup) than the close four bars prior.