Thomas DeMark Sequential System

[sikandar]

Here is one more method I found in one of the article from TA magazine..... Your thoghts please???

DeMark variation (The TRADING Systems Lab):

Rules:
1. Prepare to go long today if
a. the true high from four days ago is higher than the high from either two, three or five days ago, and
b. yesterdays close is lower than the close two days ago, and
c. todays open is lower than the high four days ago.

2. Prepare to go short today if
a. the true low from four days ago is lower than the low from either two, three or five days ago, and
b. yesterdays close is higher than the close two days ago, and
c. todays open is higher than the low four days ago

3. Go long today with a stop order at the true high of four days ago, plus 0.1 percent.

4. Go short today with a stop order at the true low of four days ago, minus 0.1 percent.

5. Risk 2 percent of available equity per trade.

6. Exit all trades with a loss if the market moves against the position by 4 percent or more.

7. Exit all trades with a profit if the market moves in favor of the position by 12 percent or more.

8. Exit all trades after five days, counting the day for the entry as day one, and no matter how late in the day the trade was made (i.e., a trade executed at 2:50 p.m. on Monday would be exited Friday the same week).

Looks interesting ,Can it be coded

 

[joy.edakad]

Here is one more method I found in one of the article from TA magazine..... Your thoghts please???

DeMark variation (The TRADING Systems Lab):

Rules:
1. Prepare to go long today if
a. the true high from four days ago is higher than the high from either two, .......

Hi,

Can someone tell me what is "true high"

Thanks

 

[Smart_trade]

Hi,

Can someone tell me what is "true high"

Thanks

True high is a high of the bar or the close of earlier bar whichever is higher and true low is low of the bar or the close earlier bar whichever is lower.

Smart _trade

 

[kenneth]

_SECTION_BEGIN("DeMark variation");
SetChartBkGradientFill( ParamColor("BgTop", colorLavender),ParamColor("BgBottom", colorBlack));
/*DeMark variation (The TRADING Systems Lab):

Buy set UP for tomorrow
*/
_SECTION_BEGIN("Price");
SetChartBkGradientFill( ParamColor("BgTop", colorLavender),ParamColor("BgBottom", colorBlack));
SetChartOptions(0,chartShowArrows|chartShowDates);
Title = Name() +" "+" (" + StrLeft(FullName(), 10) +")"+ " "+ EncodeColor(colorBlue) + " DeMark Variation " + " "+Interval( format = 2 ) + Date()
+ "\n" + " Price: " + C + " O: " + O + " H: " + H + " L: " + L + "\Vol: " +WriteVal( V, 1.0 ) + EncodeColor( colorRed ) + " " + EncodeColor( colorBrown ) +" Change"+ WriteVal(ROC( Close, 1) ) + "%"
;

_SECTION_END();
Buy =Ref(H,-4) > (Ref(H,-2) AND Ref(H,-3) AND Ref(H,-5))AND Ref(C,-1)<Ref(C,-2) AND O<Ref(H,-4 );
//Sell set UP for tomorrow

Sell= Ref(L,-4)<(Ref(L,-2) AND Ref(L,-3) AND Ref(L,-5))AND Ref(C,-1)>Ref(C,-2) AND O>Ref(L,-4 );
_SECTION_BEGIN("4daybreakouts");
Filter=Buy OR Sell;
//AddTextColumn(FullName(), "Company Name");
AddColumn(C, "Close", 1.3,IIf(C > BBandTop( C, 20, 2 ), colorRed, colorGreen)); ;
AddColumn(Buy, "Buy setup", 1);
AddColumn(HHV(H,4)+HHV(H,4)*.001,"Buyabove");
//AddColumn(Sell, "sell", 1);
//AddColumn(LLV(L,4)-LLV(L,4)*.01, "SellBelow", 1);
AddColumn(HHV(H,4)+HHV(H,4)*.13,"Profit target");
AddColumn(V,"Vol",1, IIf(V > Ref(V,-1), colorGreen, colorRed));

 

[Smart_trade]

Thanks Smart_trade! I don't mind posting other discussion points here..... I have no interest in starting new thread.... I was just wondering what would be better from maintainability point of view... Anyways, so here are couple of points from Sir TD's articles....

1.
Absolute retracements - this is the derivative in use of Fib. As per TD, we should use Fib ratio percent directly to current or relative price rather than move...

How most of us use it:
for a market that rallied from 40 to 60, the 38.2-percent retracement level would be calculated by multiplying the price move (20 points) times the ratio (.382) and subtracting the result (7.64) from the high (60 - 7.64 = 52.36).

TD's method for it:
Multiplying a high close of 60 by the 61.8 percent downside ratio would result in a support target of 37.08. This “absolute” approach removes the subjectivity normally associated with selecting price moves and applying Fibonacci ratios.

2.
Break out qualifiers:
First, in terms of upside breakouts, there should be a down close the day before the breakout. TD has also experimented with a close less than the open.

The second qualifier is an open above the trend line and above the previous day’s close, because in a situation where you might have a very steep down trend line the market could open above the trend line, but not above the previous day’s close, and trade one or two ticks higher. The move above the previous day’s close confirms the move. Also, for these confirmations, the open can never be the high — for an upside breakout.

3.
Moving Averages from TD's point of View:
TD uses the concept of moving averages. For example, He’ll start the process when there’s a high lower than the prior 12 highs — that’s when we knows the market is in a downtrend; the opposite would be true for an uptrend. At that point, we’ll begin calculating a five-day moving average of the highs. If the market closes above the moving average and opens above that close the next day, that constitutes an upside breakout. But the moving average is only active four days, unless the market makes another high that’s lower than the prior 12 highs. Basically, the market has to provide evidence it’s in a trend — a high lower than the prior 12 highs or a low higher than the prior 12 lows — before I’ll apply the moving average. And when that prerequisite is no longer in effect, the moving average is cancelled.

Has anyone tried all these derivatives of basic technical analysis on Indian market and stocks???? I tried to do some research on Absolute Retracement but could not find any convincing results....

I have used DeMarks trendline research,qualifiers and the target calculation in my own trading with very good results.I have also used sequential,Combo and the Oscillator research with good success.The things I could not get proper handle on are retracement,daily range projection,and small systems like TD carrie,TD trap,TD Mehan etc they did not work in very precise manner.

TD Point reversal,TD Double TD Point,TD Camoflage etc work pretty well in our mkts.

Trade well,

Smart_trade

 

[Apurv7164]

_SECTION_BEGIN("DeMark variation");
SetChartBkGradientFill( ParamColor("BgTop", colorLavender),ParamColor("BgBottom", colorBlack));
/*DeMark variation (The TRADING Systems Lab):

Buy set UP for tomorrow
*/
_SECTION_BEGIN("Price");
SetChartBkGradientFill( ParamColor("BgTop", colorLavender),ParamColor("BgBottom", colorBlack));
SetChartOptions(0,chartShowArrows|chartShowDates);
Title = Name() +" "+" (" + StrLeft(FullName(), 10) +")"+ " "+ EncodeColor(colorBlue) + " DeMark Variation " + " "+Interval( format = 2 ) + Date()
+ "\n" + " Price: " + C + " O: " + O + " H: " + H + " L: " + L + "\Vol: " +WriteVal( V, 1.0 ) + EncodeColor( colorRed ) + " " + EncodeColor( colorBrown ) +" Change"+ WriteVal(ROC( Close, 1) ) + "%"
;

_SECTION_END();
Buy =Ref(H,-4) > (Ref(H,-2) AND Ref(H,-3) AND Ref(H,-5))AND Ref(C,-1)<Ref(C,-2) AND O<Ref(H,-4 );
//Sell set UP for tomorrow

Sell= Ref(L,-4)<(Ref(L,-2) AND Ref(L,-3) AND Ref(L,-5))AND Ref(C,-1)>Ref(C,-2) AND O>Ref(L,-4 );
_SECTION_BEGIN("4daybreakouts");
Filter=Buy OR Sell;
//AddTextColumn(FullName(), "Company Name");
AddColumn(C, "Close", 1.3,IIf(C > BBandTop( C, 20, 2 ), colorRed, colorGreen)); ;
AddColumn(Buy, "Buy setup", 1);
AddColumn(HHV(H,4)+HHV(H,4)*.001,"Buyabove");
//AddColumn(Sell, "sell", 1);
//AddColumn(LLV(L,4)-LLV(L,4)*.01, "SellBelow", 1);
AddColumn(HHV(H,4)+HHV(H,4)*.13,"Profit target");
AddColumn(V,"Vol",1, IIf(V > Ref(V,-1), colorGreen, colorRed));

Thanks a ton! Ken,
You are true asset to the group. Last night I posted this before going to bed and what I'm seeing in the morning is ready AFL.... This was really something like angel for me

I have just ran scan on this.... not sure what we gonna get (I mean if we gonna get any trading oppertunity, please don't take it as I doubt on ur AFL..)... I'll update you guys if I come accross something interesting....

 

[joy.edakad]

I have used DeMarks trendline research,qualifiers and the target calculation in my own trading with very good results.I have also used sequential,Combo and the Oscillator research with good success.The things I could not get proper handle on are retracement,daily range projection,and small systems like TD carrie,TD trap,TD Mehan etc they did not work in very precise manner.

TD Point reversal,TD Double TD Point,TD Camoflage etc work pretty well in our mkts.

Trade well,

Smart_trade

Hi, Smart Trade,

I came across Demark's book "The New Science of Technical Analysis" recently and back tested TD trend line method manually. (of course with charting software, but not with programing.) Sure, it is promising but not used in real trading. I have to research more before I start trading with TD trend lines. I am glad to know u used it successfully with good results. Thanks a lot for sharing ur views and results.

Regards

 

[kenneth]

Hi Apurv,

I am not an expert. Hope the ALF as per the conditions on your post. May be you add the following for exploration and see the percentage loss for the last three days.

AddColumn(ROC( Close, 3),"3 days Change%");

Regards
Ken

 

[Smart_trade]

Hi, Smart Trade,

I came across Demark's book "The New Science of Technical Analysis" recently and back tested TD trend line method manually. (of course with charting software, but not with programing.) Sure, it is promising but not used in real trading. I have to research more before I start trading with TD trend lines. I am glad to know u used it successfully with good results. Thanks a lot for sharing ur views and results.

Regards

Hi Joy,

DeMark's second book "New Commodities Timing Methods " give much better coverage on his systems like Sequential,Combo,Oscillators Etc.This is the best book of the three he has written so far.

Trade Well,Best Wishes,

Smart_trade

 

[Smart_trade]

Hi Apurv,

I am not an expert. Hope the ALF as per the conditions on your post. May be you add the following for exploration and see the percentage loss for the last three days.

AddColumn(ROC( Close, 3),"3 days Change%");

Regards
Ken

Great work Keneth,

I do not understand the coding or programming at all but I am sure your AFL will help traders who have inclination and understanding for computerised trading systems.Keep it up !!!

Regards,Trade Well !!!

Smart _Trade