Tom Demark Trend lines

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104# Tom Demark Trend Line Strategy Trading System

Submit by Joy22

Setup Chart
1. EMA (exponential moving average)9 , Ema (exponential moving average) 30
2. Momentum indicator ( draw a horizontal line at the 100 point).
3. The hourly chart.
4. Draw a Tom Demark trend line (connecting at least 3 swing high (or low). And should avoid steep angles.

Long Entry when the 9 ema crosses up the 30 ema and the momentum line is above 100. And price breaks the down trend line. ( The trend line is our invaluable filter so make sure you do a lot of practice with it). Entry should be placed at the opening of the new hourly candle after the cross (to make sure the crossing and trend break are real and to keep away from whipsaw).

Short Entry when the 9 ema crosses down the 30 ema and the momentum line is below 100. And price breaks the trend line, at the new hourly candle after the EMA crossing.

The ema crossing can occur before or after the trend line break.

Stop loss : 40 pips (it has to be respected).

Target : from 40 pips up to 150 pips (depending on pair volatility and current situation).
Move your stop in the direction of trade in steps of 10 pips. When market reaches 75% of its daily range tighten your stop. When you see signs of reversal close order at market price. When you do not see any signs of reversal get rid of your limit and follow the price very closely with your trailing stop.

TD Points

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To draw TD Lines one first must identify TD Points (Tom DeMark Points). In all cases, the bar to the right of the TD Point being tested must be complete.

To draw the current upper TD Line (called the TD Supply Line), connect the next most recent TD High Point that is higher than most recent TD High Point, to the most recent TD High Point, then extend it to the right. The upper TD Line must slope downward.

Share your opinion, can help everyone to understand the forex strategy.

#6 Tom DeMark Trend lines

This is a well know trend line breakout strategy by Tom DeMark.
The only difficulties traders had earlier were all about constantly drawing trend lines and calculating profit targets.

With a help of custom MT4 indicator this problem was solved.

Two variations of the same indicator:

As you can see, the indicator not only draws automatic trend lines, it also shows profit targets or exit levels.

Edward Revy,
http://forex-strategies-revealed.com/

Copyright © Forex Strategies Revealed

Dear Edward,i just came across TD trendline indicator just a few days ago and i think is really great.Please i will like to know how to calculate the take profit manually.By this i mean the take profit that is being displayed on the chat when those fractals or the TD Lines joins.Please reply.I will be waiting for your reply.Mike

I have just one quick question and confusion regarding how td supply lines (let’s just use supply line as example, once htis question is answered, the answer to td demand line is naturally resolved too) are drawn in the case when the more recent td point is ABOVE instead of below the preceding td point, hence creating an increasing instead of declining td suppply line. Tom demark, in both his books (new market timing techniques, and day trading options) clearly stated that this td supply line is only eligible if it is declining but he did not specify what to do with the 2 td points in this event. say we already have a declining td supply line level 1 (let’s call them A and B, with B the more recent td point), then now we discovered a new td level 1 point C, however, C is higher than than B, now what do we do? do we discard the C and still keep the original td line (connected by A and B) intact, using it to determine whether future breakouts are qualified? or do we simply NOT have any active level 1 td line until we find a td level 1 point D such as line CD is downward sloping? and if CD is not, test if BD is declining and if BD is not, if AD is.

Thank you very much in advance for any guidance anyone can provide. I would really appreciate it!

I am also using this strategy. But i would like to know the best time frame to apply on this strategy and if the use of stochastic with this indicator is advisable. Pls i need your contribution. This is my email. [email protected]

At first, I thought this indicator would be great. So, I combined the TrendMeLeaveMe EA with this indicator. I had it running on 10 pairs. Wow, it was a heartbreak to see my balance and equity diminished. I guess I’ll return to my good old fashion manual trading that generates real profit on a daily basis.

Hi Everyone,
Re the #3 Rule Qualifier. I understand the upside break rule, but for breaks to the downside (supply side)should the selling pressure calculation be the difference between the high & close added to the close? This is not clear in the rules cheat sheet, unless I’ve missed the point:-)

Hi All,
Very interesting and helpful site you have here Edward; I am most impressed by your patience and willingness to answer even the most trivial-seeming question!

My brain being a bit over the hill now, I wondered if anyone has an indicator that can examine all the valid TD TL break criteris and alert that a trade is set up to go?

i’m kinda new to demark could you tell me the significance of the lines . i always have this problem . after entering the candles almost always turns , sometims when i;m making it suddenly turns. could demark help me on this. could tell me when to enter or exit and when to take profit. much obliged

but how do i get the first variation, the second variation is too convulted

Thanks for the good work you are doing out there. May God reward you abundantly.

Please how can i get the the support and resistance indicator that eddy mustika uses in his chart up there? pls you can send it to me at [email protected]

thanks in advance

Thank you my man,you are indeed a great man and am very sure you are making great profit from trading forex.Some TD Rules do not apply to forex market because Gaps are Rare in Fx Markets as opposed commodities/Stocks.Thanks once again.
zakky

Also, if it is a supply trendline is the breakout always going to be up to take the trade and vice verse with a demand line? Thanks

Thank you to the question above. Exactly what I want to know. Also could anyone put an example chart up from mt4 with either on the above indicators on it and explain what everything is. I get to a stage where I’m pretty sure I understand it but then something happens where I think otherwise. Thanks.

Thanks for all the useful information. I m very new to TD. What is the difference between the two indicators. Also, I trade on daily charts. should I use the “TD-3-1 Eng” or “TD-3_LA Mod_. “.
Also, appreciate if you can explain what is LL_1, HL_1, HC_1 etc. Tks alot.

Thanks for the new stratgy, i am a big fan of trendline and heard allot about Tom. this is the best indicator I’ve seen so far.Definitivamente TOM DeMark is a genius of forex.

Thank you very much,

Best Regards
Emmanuel Kingsle
(From Nigeria)

Tom Demark Trendlines Indicator

Traders taking advantage of Tom Demark Trend Lines can earn money on all timeframes, down to M15. Both, quick scalpers and long term traders can profit from this tool. Addationally, you might not want to wait on a break of a TL, but you can trade its bounce i.e: the price is bouncing inside a triangle drawn by Tom Demark Trend Lines.

Here are the breakout factors to consider before opening long or short trade:

Upside breakout initiators

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

Initiator 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.

Initiator 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.

Initiator 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 initiators

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

Initiator 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.

Initiator 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.

Initiator 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.

There is one thing I must admit: the method is most profitable on the higher the timeframe.
Sometimes I use it on M15 but I really want prefere to use it on H1 and higher, becouse on low TF there is a lot of market noise.

With TD TL, trader 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 like to trade are (ranked by my favourite): USDJPY, GBPUSD, EURUSD, USDCHF, EURJPY, GBPCHF.

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