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Overview
Winner: Book Series Cover Design, The Bookbinders Guild of New York/2009 New York Book Show Awards
"Long a secret weapon for the hedge-fund elite," says Trader Monthly, the DeMark Indicators are now used by more than 35,000 traders.
This book provides an easy-to-follow system for using the indicators to identify market turns as they happen.
Author Jason Perl gives a concise introduction to thirty-nine of the DeMark Indicators, and then shows how to combine the indicators and time frames to achieve a higher probability of trading success.
Thomas R. DeMark, the creator of the DeMark Indicators and one of the most well-respected practitioners of technical analysis wrote the Foreword to this book.
This is the second book in the Bloomberg Market Essentials: Technical Analysis series, which covers the key elements of the most widely used technical analysis tools.
Product Details
| ISBN-13: | 9781576603147 |
|---|---|
| Publisher: | Wiley |
| Publication date: | 10/01/2008 |
| Series: | Bloomberg Financial , #40 |
| Pages: | 224 |
| Product dimensions: | 6.20(w) x 9.00(h) x 1.20(d) |
About the Author
Prior to joining UBS, he was an independent consultant advising proprietary desks and hedge funds on short-term trading strategies as well as helping institutional investors with trading system design and development. He was also a technical strategy adviser to a number of large financial data vendors and a contributing editor for Futures & Options World, FX & MM, Petroleum Argos and the International Petroleum Exchange's (IPE), Pipeline Magazine. Jason's area of technical expertise is the DeMark indicators, which he has been using for the past nineteen years.
A portion of the proceeds received by the author for this book goes to the Robin Hood Foundation. Robin Hood changes fates and saves lives in New York City by applying investment principles to charitable giving and supporting the most effective poverty-fighting programs in all five boroughs of New York City. For more information, go to: www.robinhood.org
Read an Excerpt
Table of Contents
Foreword, by Tom DeMark xvAcknowledgments xix
Introduction xxi
Author’s Note xxv
About DeMark Indicator Trademarks xxvii
1 TD Sequential: Defining the Trend and Identifying Exhaustion Points 1
TD Setup 2
Bearish TD Price Flip 2
TD Buy Setup 3
Interruption of a TD Buy Setup 4
Completion of the First Phase of TD Sequential 4
TD Sell Setup 4
Bullish TD Price Flip 4
TD Sell Setup 4
Interruption of a TD Sell Setup 4
Using TDST Levels to Determine the Underlying Trend Bias 5
TD Sequential vs. More Conventional Momentum Indicators 6
TD Setup Scenario I: Consolidation/Reversal 6
TD Setup Scenario II: Confirmed Trend Extension 8
TD Buy Setup “Perfection” 9
TD Buy Setup “Perfection” 11
Trading a TD Buy Setup 12
Perl’s Rules for Trading TD Buy Setups Objectively 13
Risk Management: Calculating the TD Risk Level for Trading a TD Buy Setup 14
TD Sell Setup “Perfection” 14
Trading a TD Sell Setup 14
Perl’s Rules on When to Initiate a Short Position Following a Completed TD Sell Setup 16
Risk Management: Calculating the TD Risk Level for a TD Sell Setup 17
TD Setup vs. TD Sequential Countdown 17
To Initiate TD Buy Countdown 17
To Complete a TD Buy Countdown 19
TD Buy Countdown Cancellation 21
Filters That Cancel a Developing TD Buy Countdown 21
TD Buy Countdown Cancellation and Recycle Qualifiers 21
TD Buy Countdown Cancellation Qualifier I 21
TD Buy Countdown Cancellation Qualifier II (a TD Buy Setup Within a TD Buy Setup) 22
TD Buy Countdown Recycle Qualifier 22
An R Will Appear 22
Entering a Long Position 24
Two Ways to Enter a Long Position 24
Alternative Strategy for Entering a Long Position 25
Requirements for a TD Camouflage Buy 25
Requirements for a TD Clop Buy Signal 25
Requirements for a TD Clopwin Buy Signal 26
Requirements for a TD Open Buy Signal 26
Requirements for a TD Trap Buy Signal 26
TD Buy Termination Count 26
Risk Management: For a TD Buy Countdown 26
Frequently Asked Questions 28
Requirements for Validation of a TD Sequential 9-13-9 Buy Count 29
Risk Management: For TD Sequential 9-13-9 31
TD Sell Countdown 31
Requirement for a TD Sell Countdown 31
To Complete a TD Sell Countdown 31
TD Sell Countdown Cancellation 34
Filters That Will Cancel a Developing TD Sell Countdown 34
TD Sell Countdown Cancellation and Recycle Qualifiers 34
TD Sell Countdown Cancellation Condition I 34
TD Sell Countdown Cancellation Condition II (a TD Sell Setup Within a TD Sell Setup) 35
TD Sell Countdown Recycle Qualifier 35
Entering a Short Position Following a Completed Thirteen TD Sequential Sell Countdown 35
Alternative Strategy for Entering a Short Position 36
TD Camouflage Sell Signal Requirements 37
TD Clop Sell Signal Requirements 38
TD Clopwin Sell Signal Requirements 38
TD Open Sell Signal Requirements 38
TD Trap Sell Signal Requirements 38
TD Sell Termination Count 38
Risk Management: For a TD Sell Countdown 39
Frequently Asked Questions 39
Requirements for Validating a TD Sequential 9-13-9 Sell Count 41
Risk Management: For a TD Sequential 9-13-9 Sell Count 41
Combining Time Frames for Additional Confidence 43
Frequently Asked Questions about TD Sequential 46
Risk Management for TD Sequential 49
TD Sequential: Recommended Settings 57
TD Aggressive Sequential 58
TD Aggressive Sequential 58
2 TD Combo 59
TD Combo Buy Setup 59
Requirements for a TD Combo Buy Setup 60
Differences in Buy Countdown: TD Combo vs. TD Sequential 60
TD Combo Buy Countdown 60
Requirements for a TD Combo Buy Countdown Version I (Strict Version) 60
Requirements for a Td Combo Buy Countdown Version ii (Less-Strict Version) 61
To Enter a Long Position 62
Risk Management: For Entering a TD Combo Buy Countdown Long Position 62
Requirements for a TD Combo Sell Setup Version I 62
Differences in Sell Countdown: TD Combo vs. TD Sequential 63
Requirements for a TD Combo Sell Countdown Version I (More Strict) 64
Requirements for a Td Combo Sell Countdown Version II (Less Strict) 65
Risk Management: Calculating the Risk Level of a Short Position Following a TD Combo Sell Countdown 65
TD Combo Version I: Recommended Settings 66
3 TD D-Wave 69
The Underlying Elliott Wave Principle 70
Elliott Wave Basics 71
DeMark’s Mechanized Version of Elliott Wave 73
The Time Aspect of the TD D-Wave Requirements 74
TD D-Wave Requirements for Wave 1 74
TD D-Wave Requirements for Wave 2 74
TD D-Wave Requirements for Wave 3 74
TD D-Wave Requirements for Wave 4 75
TD D-Wave Requirements for Wave 5 75
TD D-Wave Requirements for Wave A 75
TD D-Wave Requirements for Wave B 76
TD D-Wave Requirements for Wave C 76
Additional Qualifying Rules for the Application of the TD D-Wave Indicators for an Uptrend 76
Additional Qualifiers for the Application of the TD D-Wave Indicators for a Downtrend 77
Calculating TD D-Wave Projections 78
Bull Market Price Projections 78
The Ultimate Targets for TD D-Waves 5 and C 80
Upside Target for TD D-Wave 5 80
Downside Target for Downside TD D-Wave C 80
Bear Market Price Projections 80
Using Closing Prices for Price Projections 82
TD D-Wave 2: Shallow vs. Deep 82
To Calculate the Objective for TD D-Wave 5 82
To Calculate TD D-Wave C 82
To Determine the Eventual Downside Objective for TD D-Wave 5 83
To Determine the Upside Objective for TD D-Wave C 83
TD D-Wave Frequently Asked Questions 83
The Relative Strength Index 83
TD D-Wave: Recommended Settings 89
4 TD Lines 91
The Three TD Demand Line Qualifiers 94
TD Demand Line Qualifier Condition One 94
TD Demand Line Qualifier Condition Two 95
TD Demand Line Qualifier Condition Three 96
Calculating the Objective for a TD Demand Line Break 96
To Determine the Objective for a Qualified Downside Violation 96
Exiting a Short Position Using TD Demand Line 97
TD Supply Line Qualifiers 97
Initiation of a Fresh Long Position Qualifier One 98
Initiation of a Fresh Long Position Qualifier Two 99
Initiation of a Fresh Long Position Qualifier Three 100
Calculating the Objective for a TD Supply Line Break 100
TD Supply Line and Exiting a Long Position 100
TD Lines: Recommended Settings 101
5 TD Retracements 103
Determining References for Projecting TD Relative Retracements 103
Three Conditions for Validating a TD Relative Retracement Level: Only One Needs To Be Satisfied for a Qualified Break 106
Conditions That Invalidate an Upside Break of a TD Relative Retracement Level 107
Conditions That Qualify a Downside Break of a TD Relative Retracement Level 107
To Exit a Short Position After a Qualified Downside Break of a TD Relative Retracement Level 108
TD Relative Retracement: Recommended Settings 108
More Retracement Scenarios Upside Violations 109
Retracement Scenarios Downside Violations 109
Another Reversal/Consolidation Pattern 109
TD Absolute Retracement 110
Recommended Settings for TD Absolute Retracement 110
Constructing the TD Retracement Arc for Upside Retracements 111
Constructing the TD Retracement Arc for Downside Retracements 112
6 TD Trend Factor and TD Propulsion 115
TD Trend Factor 115
To Determine a Top from Which to Calculate 116
To Determine a Bottom from Which to Calculate 118
Frequently Asked Questions 120
TD Trend Factor – Recommended Settings 121
TD Propulsion 121
Defining the Initial Thrust Level for an Advance 122
Defining the Initial Thrust Level for a Decline 122
TD Propulsion: Recommended Settings 123
7 TD Oscillators 125
TD Range Expansion Index (TD REI) 125
In Case You Need Prompting on the RSI 125
TD REI Formula 128
To Establish a Value for the TD REI 129
Using the TD REI to Identify Prospective Reversals 129
Using the TD POQ to Filter TD REI Signals Further 130
For the Mathematicians 130
TD REI: Recommended Settings 132
TD DeMarker I and TD DeMarker II 133
TD DeMarker I 133
Other Conditions That Must Be Satisfied for a Prospective Buy 134
Other Conditions That Must Be Satisfied for a Prospective Sell 135
TD DeMarker I: Recommended Settings 135
TD DeMarker II 136
TD DeMarker II: Recommended Settings 137
TD Pressure 137
The OBV Indicator 137
TD Pressure: Recommended Settings 139
TD Rate of Change (TD ROC) 140
To Determine the TD ROC 140
TD ROC: Recommended Settings 140
TD Alignment 141
TD Alignment 141
To Produce the Composite TD Alignment Indicator 142
TD Alignment: Recommended Settings 142
8 TD Moving Averages 145
To Identify a Prospective Bullish Trend 146
Plotting a Bullish TD Moving Average I 146
To Identify a Prospective Bearish Trend 146
Plotting a Bearish TD Moving Average I 147
TD Moving Average I: Recommended Settings 149
9 TD Range Projection, TD Range Expansion Breakout, and TD Channels 153
TD Range Projection 153
The Three Possible Scenarios and How to Calculate Them 154
TD Range Expansion Breakout (TD REBO) 157
To Apply TD REBO to Daily Price Bars and Use the Current Price Bar’s Open as the Base 158
TD Channels 160
TD Channel I 161
TD Channel II 162
10 Short-Term Indicators: TD Differential, TD Reverse Differential, and TD Anti-Differential 165
TD Differential 165
Conditions Necessary to Produce a TD Differential Up Arrow 165
Conditions Necessary to Produce a TD Differential Down Arrow 166
TD Reverse Differential 167
Conditions Necessary to Produce a TD Reverse Differential Down Arrow 167
Conditions Necessary to Produce a TD Reverse Differential Up Arrow 169
TD Anti-Differential Up Arrow 169
Conditions Necessary to Generate a TD Anti-Differential Up Arrow 170
TD Anti-Differential Down Arrow 170
Conditions Necessary to Generate a TD Anti-Differential Down Arrow 170
11 TD Waldo Patterns 171
TD Waldo Pattern Two 171
TD Waldo Pattern Three 172
TD Waldo Pattern Four for a Prospective Bottom 172
TD Waldo Pattern Four for a Prospective Top 173
TD Waldo Pattern Five for a Prospective Top 173
TD Waldo Pattern Five for a Prospective Bottom 173
TD Waldo Pattern Six for a Prospective Bottom 173
TD Waldo Pattern Six for a Prospective Top 174
TD Waldo Pattern Seven for a Prospective Short-Term Reversal 174
TD Waldo Pattern Eight 174
12 Putting It All Together 175
The UBS FX Risk Index Components 179
13 Learning the DeMark Indicators 181
Using TD Cursor Commentary 182
TDRS
Index 187