Thomas DeMark Sequential System

[joy.edakad]

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.

Hi,

TD on retracement - An extract from "'The New Science of TA"

More important than the ratios themselves is the selection of the price points required to calculate the retracements. .........

Assume a recent low has been recorded. To establish reference points for retracement price objectives, extend an imaginary horizontal line from that recent low toward the left side of the chart to the last time a lower low has been recorded. Next refer to the highest price between these two points; that is the "critical price". By substracting the recent low from that value, price retracement levels can be projected. ...........

If price moves to a new high/low then he suggests the multiplication method as pointed by u. Otherwise establish the reage as mentioned above.

 

[chintan786]

thanks Joy.... i think accidently u have wriiten twice same message.

chintan786

 

[joy.edakad]

yes, Chintan, and the duplicate post is removed
Thanks

 

[joy.edakad]

_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));

Dear Kenneth,

pls have a look at this line,

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 );

I think it should be written like this -

Buy = (H > Ref(H,-2) OR H > Ref(H,-3) OR H > Ref(H,-5)) AND Ref(C,-1) < Ref(C,-2) AND O<Ref(H,-4);

I changed the first AND clauses to OR because the rule says " the true high from four days ago is higher than the high from either two, three or five days ago, and".

Also, How this statement is evaluated ?
Ref(H,-4) > (Ref(H,-2) AND Ref(H,-3) AND Ref(H,-5)). I think in Ami, it always evaluates to true. May be it should be written like this to get what u intent to get - (H > Ref(H,-2) OR H > Ref(H,-3) OR H > Ref(H,-5)).

Regards
Joy Sebastian

 

[Apurv7164]

Joy/Ken,

I think I'm falling short on my understanding here. How are we taking true high here in your formula????

Can anyone of you teach me, please?

Tryin to understand,
Apurv

 

[kenneth]

Thanks Joy. Think I am wrong. My apologies. Shall look in to it.

But I don't know if you are right too.

Apurv Now I find the following on the net

THOMAS DEMARK TRENDLINES
1. Trendline are drawn on TD Point leve 1, 2, 3 etc. A TD Point High is a true high, that is the high of the bar or the close of the previous day if this close > high. The reverse for true low (TD Point Low).


Regards
Ken

 

[kenneth]

Dear Kenneth,

pls have a look at this line,

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 );

I think it should be written like this -

Buy = (H > Ref(H,-2) OR H > Ref(H,-3) OR H > Ref(H,-5)) AND Ref(C,-1) < Ref(C,-2) AND O<Ref(H,-4);

I changed the first AND clauses to OR because the rule says " the true high from four days ago is higher than the high from either two, three or five days ago, and".

Also, How this statement is evaluated ?
Ref(H,-4) > (Ref(H,-2) AND Ref(H,-3) AND Ref(H,-5)). I think in Ami, it always evaluates to true. May be it should be written like this to get what u intent to get - (H > Ref(H,-2) OR H > Ref(H,-3) OR H > Ref(H,-5)).

Regards
Joy Sebastian

Hi Joy,

Looking closely at the system the AFL given by me is correct. You can use and if you want or, for some reason the scan gives the same results. and remember it is only a trade setup.The buying triggers on the next day if the price goes above high of 4 days high. So using H to flag out trade set up is incorrect. I have given the defination of true high and since I have used highday of 4 days earlier is higher than 5 days earlier gap does not exit between 5th day close and 4th day high.

My reasoning is Demark used 9 day for the tradesetup and variation uses 4days. Buy in both system are above the high of 4days.

So I am satisfied with the AFL until someone comes out with a beter one.Any one is free to change to their advantage.

Observing yesterday's scan the least percentage gap for the close and 4days high was in AnsalInfra and Dabur.Both have triggered buys. Watch them tomorow in this down market.

From the scan today GTL, Bong Refy, Mahseamless, Glaxo , Hindliver have got the buy setupa ndcloser to their 4 Day HHV

Regards
Ken

 

[kenneth]

While scanning 13day buys got Rcom. The last 5 bars shows the formation of Demark Variation

Regards
Ken

 

[chintan786]

but Ken.. if we see RPL... which was having same signal as Rcom today... then do we consider Rcom buying at current level....i think it is worth keeping an eye on....

warm regards,

chintan786

 

[joy.edakad]

Hi Joy,

Looking closely at the system the AFL given by me is correct. You can use and if you want or, for some reason the scan gives the same results. and remember it is only a trade setup.The buying triggers on the next day if the price goes above high of 4 days high. So using H to flag out trade set up is incorrect. I have given the defination of true high and since I have used highday of 4 days earlier is higher than 5 days earlier gap does not exit between 5th day close and 4th day high.

Thanks for the clarification.

My reasoning is Demark used 9 day for the tradesetup and variation uses 4days. Buy in both system are above the high of 4days.

Good reasoning, Ken, it really struck me now.