Tom demark Trendlines

anyone here used TD T'L's? they are over 70% (closer to 90) accurate with breakouts.

using TD TL can profit on all timeframes down to 15M. scalpers and long term traders can profit from this. Also, u might not wait on a break of a TL but can trade its bounce i.e: the price is bouncing inside a triangle drawn by TD TL.

here is a picture of the bounces:



and here is a picture of a breakout:


notice how the last bar before breakout closed higher (breakout qualifier)

here are the breakout qualifiers:

Upside breakout qualifiers
Qualifier 1: The price bar prior to an upside breakout must be a down close.

Qualifier 2: The current price bar’s open must be greater than both the current TD Supply Line and the
previous price bar’s close and must then trade at least one tick higher.

Qualifier 3: The previous price bar’s close plus the previous bar’s “buying pressure” must be below the current
price bar’s TD Supply Line price level.

Qualifier 4: The current price bar’s open must be above both the previous two price bars’ closes, and the
current price bar’s TD Supply Line must be above the previous price bar’s high.

Downside breakout qualifiers

Qualifier 1: The price bar prior to a downside breakout must be an up close.

Qualifier 2: The current price bar’s open must be less than both the current TD Demand Line and the previous
price bar’s close and must then trade at least one tick lower.

Qualifier 3: The previous price close minus the previous bar’s “selling pressure” must be above the current
price bar’s TD Demand Line price level.

Qualifier 4: The current price bar’s open must be below both the previous two price bars’ closes, and the
current price bar’s TD Demand Line must be below the previous price bar’s low.

TD TL Indicator

one thing i must say, the method is most profitable the higher the timeframe.

i use it on H15 but i really want to use it on H1 and greater cuz 15m is well...more market noise than H1.

with TD TL, u risk very little trading TL bounces. in fact risking 10 pips is not uncommon for me for a TP of about 20 pips + spread.

pairs i watch (ranked):

usdjpy gbpusd eurusd usdchf eurjpy gbpchf


gbpjpy only on large TF as spread is a whopping 12 pips for me.

Very interesting thing you got here, so once price reaches some of these TD lines then there are a few options I think: trade the bounce, the breakout, or do nothing

Hi Mr.,

nice thread and very interesting topic. I am not an expert in DeMark, as you will be able to tell from my next question: What are the horizontal trend lines in the indicator? Are they support and resistance lines? What is the criteria used to draw them? I understand how the TL's are drwan, but would like some light around these horizontal ones.

On the other hand, it may be helpful if you post a chart explaining your system.

Thanks.

In your chart what does the "ShowingSteps=1" & "BackSteps=0" relate to?

that's a daily trend line, look how on friday price hit 1.9865 and bounce off the line ... funny thing is a 50% fibo too.

I like Tom Demark trend lines and use them everyday in trading. Below is a simple method of trading using his method on the 4HR chart.

the Horizontal lines are calculated using TD's formulas (dont have the formulas now)

the horizontal lines are where the Take profit is best placed once TL are breached.

U can scale out profits as u go along. As for MT4 users who cant do this, i normally scale out using opposite trades.

example:
sell 3 lots of gbpusd. TP @ 1.9900, price is 1.9950.

how to scale this out?
place a buy limit of 1 lot 10 pips below the entry, 1.9940. with stop loss @ 3 lots TP of 1.9900

place another 1 lot 20 pips below @ 9930 with SL at same 1.9900.

this way u lock in profit as u go along even if u are not there. Also, once the original TP is hit, the two buy limits would be closed too.

it's not funny to me. It is rather Thrilling when these things happen..

i.e: indicator convergences

showsteps shows trendlines of the past. backsteps is to allow lagging.

I dont use backsteps.


-----------------
ps, the indicator was not written by me,

I thought that the points of the trendlines were supposed to be the highest/lowest candle within 2 candles to the left and right side of it. The indicator draws them differently, however. I'm confused on how to draw these trendlines. Could you please elaborate?

are you sure? remember trendlines are drawn from right to left and remember lower trendlines ALWAYS tilt upwards and upper TL always tilt downwards

a lower TL is drawn from the low of the right to a LOWER low to the left

like this. Notice the red highs and blue lows.

I think that pure DeMarkism would disqualify the red trend line you have drawn.

It is violated by the high of the bar following the last fractal that it is drawn to.

I can't quote chapter and verse of DeMark's book that says that, but its in there somewhere.

If I get a chance, I'll try to find it.

ok please find it

Please refer to page 37 chapter one s & P 500 left side of chart A X B ( between A and X )
Demark gives an example of a demand line drawn in the way Mr Demark as drawn his. I have searched the entire chapter on supply and demand trend lines and cannot find this restriction.

And again on page 41 and again on page 47

billbss, thanks for the concern but i think the TL is ok

hey mr jones, what is the tile of that book? should be on amozon right

Yes, it is cheap and is called ( from $34.83 used)

The New Science Of Technical Analysis

oh i think he meant this chart


that is indeed an error