Tom DeMark Indicators

[Blangis]

Does anyone have any experience of using these indicators? Bloomberg are starting to plug them but don't have any helpfiles on them or allow you to backtest them

www.tomdemark.com says :

Simply put, Tom DeMark is a scientific genius! Like the geniuses of times past, Tom has no time for niceties, for protocol, for normal human courtesies. Such things only get in the way of his creativity.To recognize Tom’s genius for trading and research, you’ll need to view him in a whole new light. He’s different. He spends his days totally immersed in his passion---making profits through ingenious trading techniques. He has no other focus. Helping other people make money is his life. It’s what he lives for.

But just because his marketing people went over the top doesn't mean that there isn't something there...

 

[oatman]

How much £££$$$$ does he like helping people?

 

[Blangis]

How much £££$$$$ does he like helping people?

He offers 8 TA modules for about $600 each, so he is a real philanthropist! I'm certainly not considering buying anything from him as BB give access to all his analytics, but I was wondering if they were any use... According to the hyperbole on his website George Soros, Paul Tudor Jones and others take him seriously.

 

[adrianallen99]

I have been using Tom Demarks sequential and gus is a big fan of Tom Demarks stuff. I have recently order one of his books.

The stuff he does is pretty good, but they are only an indication, also there is no indication of when to exit markets (stop or limits), so you have to work these out yourself. I have found his Sequential indicator is most usefull when trading options and digital options. I will post here with my opinions of his book when it eventually arrives, but Im sure Gus can give you a lot more information.

His sequential system basically counts bars, so for a short trade you would look for 9 consecutive bars with a close higher than the bar 4 periods earlier. Once setup is complete you then countdown 13 bars (not consecutive) that are higher than 2 bars earlier. The 13th bar gives a signal, and you then either trade immediately (high risk) or wait for a until the price is lower than the price 2 or 4 bars earlier (or something like that).

If you do a search on Tom Demark Sequential you will usually find something useful.

 

[Blangis]

I have been using Tom Demarks sequential and gus is a big fan of Tom Demarks stuff. I have recently order one of his books.

The stuff he does is pretty good, but they are only an indication, also there is no indication of when to exit markets (stop or limits), so you have to work these out yourself. I have found his Sequential indicator is most usefull when trading options and digital options. I will post here with my opinions of his book when it eventually arrives, but Im sure Gus can give you a lot more information.

His sequential system basically counts bars, so for a short trade you would look for 9 consecutive bars with a close higher than the bar 4 periods earlier. Once setup is complete you then countdown 13 bars (not consecutive) that are higher than 2 bars earlier. The 13th bar gives a signal, and you then either trade immediately (high risk) or wait for a until the price is lower than the price 2 or 4 bars earlier (or something like that).

If you do a search on Tom Demark Sequential you will usually find something useful.

Thanks Adrian.

TD Sequential 1 minute, and TD combo 1 minute have just signalled a short on the FTSE at 4508. Let's see how it pans out. :|

 

[Blangis]

Thanks Adrian.

TD Sequential 1 minute, and TD combo 1 minute have just signalled a short on the FTSE at 4508. Let's see how it pans out. :|

Close and reverse given at 4499.

 

[Blangis]

Short Nasdaq 100 from 1484.8. TD 1 minute sequential gave short signal at 1475.53 but TD combo 1 minute did not confirm. Both gave short signal at 1484.8. If I am interpreting it correctly, price target is 1471.

 

[TGM]

Blangis,

How is Tom DeMark working for you? How is it going? You using it on bloomberg? You are using the sequential and combo together?

 

[Tubbs]

I've read a Demark book - sounded good but also a little far fetched. I can't believe the market can fit into perfect patterns of 13 consecutive up bars etc. Just doesn't feel right - you know?

 

[Dentalfloss]

there are demark indecators on prophet.net.input the stock or the index and see.otherwise input the strategies into metastock.i have read the book.its been in the garden shed for the last two years.very tempted to put it in the bonfire on friday

 

[adrianallen99]

I've read a Demark book - sounded good but also a little far fetched. I can't believe the market can fit into perfect patterns of 13 consecutive up bars etc. Just doesn't feel right - you know?

As with any indicator, it can work great one day, and be completely useless the next. It is just an indication of what might happened and probably best used with another indicator. perhaps Stochastics, MA's or you could even try using Price :cheesy:

 

[mauzj]

This article on the subject is interesting:

http://www.etfdigest.com/TDSequential.pdf

I just went to his presentation at Bloomberg but hadn't done any prior reading so had no idea what he was talking about.

 

[Stevoswing]

I see Jason Perl makes the point in his book that he has not felt the need to backtest the signals because he's been using the indicators in real time for 14 years. He also emphasises TD Sequential is an indicator, not a signal.

Nevertheless, is anyone aware of any available back-tests on TD Sequential, e.g. on S&P 500? I accept the results will depend on the rules for the initial stop-loss, moving the stop-loss if the trade goes in your favour and profit-taking (DeMark doesn't define the last two), but perhaps someone somewhere has tried some examples.

Thanks for your help.

 

[Shakone]

you would look for 9 consecutive bars with a close higher than the bar 4 periods earlier. Once setup is complete you then countdown 13 bars (not consecutive)

Why 4, 9 and 13? There seems to be no real reason for these and not other numbers, so I am immediately skeptical. If it works, it is probably an unnecessarily complicated way of capturing some other property of price movement.

 

[Stevoswing]

Why 4, 9 and 13? There seems to be no real reason for these and not other numbers, so I am immediately skeptical. If it works, it is probably an unnecessarily complicated way of capturing some other property of price movement.

I don't think there can be any deep underlying reason as to why 4, 9 and 13 work (a comment which I would argue holds for any mechanical system that involves counting bars). According to Perl, DeMark was fascinated by Fibonacci numbers - which takes care of 13. DeMark had hoped that 8 worked the best and was disappointed that 9 (non-Fib) was better. But since TD Setups have a 4-period look-back, 4+9=13, bingo.

TD Sequential is simply an objective indicator that aims to pick turning points. Perl points out that there will be times when TD Sequential doesn't work for prolonged periods and, because entry is countertrend, it can be very tough to stick with after a bad run.

I'm still on the look-out for back-tests, so if you come across any I'd be pleased to hear from you.

 

[magten]

looks like a load of ??? Indicator!!!

Get it?

Indicators indicate!
Thats it. They only show you what is happening. No Magic, just indicate
So keep it simple and do yourselves a big favour. Figure it out yourself. In the long term you will be very happy you developed the skill set do do this.

 

[OxfordStrat]

Nevertheless, is anyone aware of any available back-tests on TD Sequential, e.g. on S&P 500?

The back-test of TD Sequential. The spectrum of time exits is applied.

 

[Stevoswing]

The back-test of TD Sequential. The spectrum of time exits is applied.

OxfordStat
Thank you for the link, it is very much appreciated. The overall results for the portfolio look a lot worse than other strategies you've tested (the best of which are graded B). Are you able to share the main peformance results for the S&P 500 alone?
Steve