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DeMark Studies Users Guide

Aspen Research Group, Ltd.


710 Cooper Avenue, Suite 300 Glenwood Springs, Colorado 81601 Sales: 800 359 1121 Support: 970 945 2921 Telefax: 970 945 9619

Copyrights
Copyright 2001, Aspen Research Group, Ltd. ALL RIGHTS RESERVED. Trademarks held by Thomas R. DeMark: D-Wave Daily Range Projections DeMarker Indicator Countdown Intersection Setup Range Expansion Index (REI) Sequential TD Breakout Qualifiers TD Demand Line TD Dollar Rated Option Ratio TD Line Breakout TD Line Value TD Lines TD New High-New Low Index TD Points TD Price Points TD Price Projector TD Retracement Arc TD Retracement Qualilfier TD Supply Line TD Supply Points Trend Factors Information in this document is subject to change without notice. No part of this document may be reproduced or transmitted in any form or by any means, electronic or mechanical, for any purpose, without the express written permission of Aspen Research Group, Ltd. Print Date: 11/12/01 4:17 PM

Conventions

The Add Study Toggle

Library of Congress Cataloging in Publication Data For Tom DeMarks Book


DeMark, Thomas R., 1947The new science of technical analysis / Thomas R. DeMark. p. cm. - (Wiley finance editions) ISBN 0-471-03548-3 (acid-free paper) 1. Investment analysis. 2. Stock price forecasting. 3. Financial instruments-Prices-Forecasting. I. Title. II. Series. HG4529.D46 1994 332.6-dc20 Printed in the United States of America

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Table of Contents

Table of Contents
TABLE OF CONTENTS ............................................................................................... I PREFACE ...............................................................................................................IV
Conventions ..............................................................................................................................................iv

DEMARK STUDIES .................................................................................................. 1


The Select DeMark Study Menu ..............................................................................................................1 The Add Study Toggle ............................................................................................................................1 Done Selection ........................................................................................................................................2 The Trend Line Functions Menu .............................................................................................................2 The TD Options Selection .......................................................................................................................3

TRENDLINES ........................................................................................................... 4
TD Lines .................................................................................................................................................4 Qualifying TD Lines............................................................................................................................6 TD Lines Parameters ...........................................................................................................................8 Trend Factors ......................................................................................................................................16 Trend Factors Parameters ..................................................................................................................19

RETRACEMENTS ................................................................................................... 20
TD Retracement Arc ...........................................................................................................................20 TD Retracement Arc Parameters .......................................................................................................21 Relative Retracement ..............................................................................................................................22 Qualifying Relative Retracement ..........................................................................................................24 Relative Retracement Parameters..........................................................................................................25 Lines Parameters in Relative Retracement ............................................................................................26

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Table of Contents

Absolute Retracement.............................................................................................................................26 Absolute Retracement Parameters.........................................................................................................29 Lines Parameters in Absolute Retracement...........................................................................................29

OVERBOUGHT/OVERSOLD ..................................................................................... 30
Range Expansion Index ......................................................................................................................30 Range Expansion Index Parameters ......................................................................................................32 Range Expansion Breakout ....................................................................................................................35 Range Expansion BreakOut Parameters................................................................................................37 DeMarker Indicator ............................................................................................................................42 DeMarker Indicator Parameters.........................................................................................................45

D-WAVE ........................................................................................................... 47
D-Wave Parameters ............................................................................................................................50

MOVING AVERAGES .............................................................................................. 56


TDMA I ....................................................................................................................................................56 TDMA I Parameters ..............................................................................................................................58 TDMA II ..................................................................................................................................................60 TDMA II Parameters.............................................................................................................................60 TD Channel I ...........................................................................................................................................61 TD Channel I Parameters ......................................................................................................................64 TD Channel II..........................................................................................................................................65 TD Channel II Parameters .....................................................................................................................68 TD Channel III ........................................................................................................................................69 TD Channel III Parameters....................................................................................................................72

SEQUENTIAL ..................................................................................................... 74
Sequential Parameters ............................................................................................................................75
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Table of Contents

Setup Parameters ................................................................................................................................77 Cancel Cond Parameter .........................................................................................................................79 Intersection Parameters......................................................................................................................80 Countdown Parameters ......................................................................................................................82 Recycle Parameters .................................................................................................................................85 Qualifying Sequential..............................................................................................................................86

TD GAP ............................................................................................................... 90
TD Gap Parameters ................................................................................................................................91

DAILY RANGE PROJECTIONS.............................................................................. 94


Daily Range Projections Parameters .................................................................................................94

RATE OF CHANGE STUDIES ................................................................................... 97


Rate of Change ........................................................................................................................................97 Rate of Change Parameters ...................................................................................................................99 TD Pressure Index.................................................................................................................................101 TD Pressure Parameters ......................................................................................................................102 TD Pressure Ratio .................................................................................................................................104 TD Pressure Ratio Parameters.............................................................................................................107 TD Pressure Change............................................................................................................................108 TD Pressure Change Parameters .........................................................................................................110

WALDO PATTERNS ............................................................................................. 111 INDEX................................................................................................................. 112

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Preface

Preface
This publication includes information on using DeMark studies on Aspen Systems software. Using Aspen Systems software may have significant financial implications. Before using this software or adapting it to your business, you should consult with a market expert. In this guide, the nouns Aspen Systems, Aspen Graphics, and Aspen refer to the software published by Aspen Research Group, Ltd. for Bonneville Information Systems, S & P Comstock, Knight Ridder, CMA, and Signal data feeds, which software runs on standalone computers and networked computers. Companion information is available in the following publications: Aspen Options Users Guide Aspen Systems Reference Guide Aspen Systems Users Guide Basic Options Page Guide Basic Options Users Guide MESA Users Guide PLATTS User Guide Price Volume Users Guide

For Microsoft Windows users, windows help modules are currently available for: Aspen Options Aspen Systems Basic Options CBOT Market Profile DeMark Studies MESA Studies PLATTS

Conventions
Unless otherwise noted, this guide employs the following conventions: Convention b q+`
DeMark Studies Users Guide

Meaning Keycaps indicate keystrokes. Keycaps separated by a plus sign (+) indicate multiple
iv

Preface

keystrokes. Retrieve Page Main Menu Sizing a Window Italics indicate menu selections. Initial caps indicate menu titles and cross references.

DeMark Studies Users Guide

Preface

Notes

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DeMark Studies

DeMark Studies
DeMark studies consist of several studies and trend lines. These studies are available by subscription. Once you subscribe, you will receive a password that enables your system to display DeMark studies. For information on subscribing, please contact your sales representative.

The Select DeMark Study Menu


Most DeMark studies are available through the Select Study menu (DeMark studies that are retracements are available in Aspens trendline feature; see, Retracements, page 18). When you subscribe to DeMark studies, the DeMark Studies... selection on the Select Study menu is made accessible. Selecting DeMark Studies... displays the Select DeMark Study menu.

Like other study menus, the Select DeMark Study menu makes a distinction between overlays and conventional studies. Overlays automatically get displayed on top of information in the active chart windows while conventional studies replace the information in the active chart window unless you activate the Add a Study toggle.

The Add Study Toggle


An asterisk appears between the parentheses when add mode is on. Clicking on this toggle turns add mode on and off. Set to on, the study you select is displayed on top of the data in the chart. Set to off, the selected study replaces the data in the chart.

DeMark Studies Users Guide

DeMark Studies

The Trend Line Functions Menu

The Add Study toggle enables you to display two or more studies in a chart window, or in a split window. You can also use the Add Study toggle to make a conventional study behave like an overlay studythat is, to display on top of the information in the active chart window. When you are in replace mode, selecting a study replaces the content of a chart or split chart window with the study you select. Overlays are not affected by replace mode (overlays are always displayed on top of bar or formula data).

Done Selection
Causes the Select Study menu to disappear, and returns you to the active chart window.

The Trend Line Functions Menu


Several DeMark studies are available through Aspens trendline feature. (For more information on trend lines, please read chapter 7, Trend Lines, in your Aspen Graphics Users Guide.) These DeMark studies are retracements: TD Relative Retracement, TD Absolute Retracement, TD Factor (Trend Factors), and TD Arc. The DeMark Subscription changes the appearance of the Trend Line Functions menu. The retracement studies available through Aspens trendline feature appear at the bottom of the Draw Functions section of the menu, as shown in the figure below:

At the bottom of the Trend Options section of the menu, the TD Options selection makes a parameters menu for the DeMark Retracements accessible. This parameters menu is the DeMark Trendlines menu.

DeMark Studies Users Guide

DeMark Studies

The Trend Line Functions Menu

The TD Options Selection


The DeMark Trendlines menu contains four columns, one column for each DeMark study available through Aspens trendline feature.

Price Parameters, DeMark Trendlines Menu


The defaults for the price parameters are Low and High. These parameters specify the operative price or price comparison of the reference bar. Other options include Open, High, Low, Close, Mid-Point, and Average.

Ratio Lines Parameters, Trend Factors


By default, some ratios are set to On while others are set to Off. Ratios set to On are drawn. Changing a ratio to Off suppresses it.

DeMark Studies Users Guide

Trendlines

TD Lines

Trendlines
DeMark trendline studies attempt to eliminate arbitrary creation, application, and interpretation of trend lines by applying point selection criteria consistently. Despite their names and treatment in DeMarks book , The New Science of Technical Analysis, Aspen treats DeMark trendline studies as overlays. These studies create consistency by defining point selection criteria and then applying these criteria to a data set. Studies: TD Lines Trend Factors

TD Lines
TD Lines are mechanically and objectively constructed. The trendlines drawn are TD Supply Lines and TD Demand Lines. Once the TD Lines are broken and qualified, the study automatically calculates a price projection. A qualified breakout appears as a solid line; whereas, a disqualified breakout is a dashed line.

DeMark Studies Users Guide

Trendlines

TD Lines

DeMark Studies Users Guide

Trendlines

TD Lines

TD Lines are drawn by connecting TD Points. A level one TD Point high is formed once a high is immediately preceded and succeeded by bars with lower highs. Thus, a level one high requires only three bars to make this determination. TD Point highs vary in magnitude based on the number of immediately preceding and succeeding bars that have lower highs. For example, level two has two bars preceding, two bars succeeding, and so on through level nine. The converse of these principals governs TD Point lows. The study command for TD Line is .TDLINE. For further information on TD Line, please refer to Thomas S. DeMark, The New Science of Technical Analysis, New York: John Wiley & Sons, 1994, Chapter 1, Trendlines.

Qualifying TD Lines
By first qualifying a TD Line, the user reduces the risk that intra-day entry (going with the TD Line Breakout) will fail, and, at the same time, increases the chance of
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Trendlines

TD Lines

success should the user fade the disqualified trade (going against the TD Line Breakout). To be a Qualified TD Line, price must satisfy one of the following conditions: 1. The close of the bar prior to upside/downside penetration is down/up versus the close two bars ago, OR 2. The open of the breakout bar exceeds upside/downside the TD Line and also opens above/below the previous bars close, OR 3. The difference between the previous bars close and its true low/high added to/subtracted from the previous bars close is less than/greater than the TD Line. A true high is that bars high or the close of the previous bar, whichever is greater; a true low is that bars low or the close of the previous bar, whichever is less. To be a Disqualified TD Line (dashed line), NONE of the above conditions exist, and the reverse logic applies. Please note that you can customize qualifiers using the Parameter menu.

Disqualifying TD Lines
To be a disqualified TD Line, use the reverse logic of the above conditions.

DeMark Studies Users Guide

Trendlines

TD Lines

TD Lines Parameters

A TD Point high of level K is a high which is strictly grater than the highs of the K preceding and K following bars. Similarly, a TD Point low of level K is strictly less than the lows of the K preceding and K following bars. (Gaps are not counted in making this determination.) Note that the level number of a recent high or low may not be finally determinable until more bars are obtained; a high or low N bars back from the present cannot now be labeled as having a level more than N, but it may later be given a higher number. Similarly, the level of a bar near the start of the available data may be uncertain. Either chart or true highs and lows can be used to determine TD Points; the latter effectively means that a high or low is a level K TD Point only if it is greater than or less than the close of the K+1st prior bar. (A strict application of the definition of true high/low would mean that a bar that closes at its high/low cannot be a TD Point because the next bars true high or low is at least equal to that close.) The TD Lines study identifies TD Points by drawing the level number above or below the high or low of the bar. This display can be suppressed. A TD Lines trendline is drawn through two TD Points. A supply trendline is drawn between a TD Point high (Point B) and the most recent prior TD Point low (point A) that is strictly greater than point B. The line is then extended to the right of point B according to the rules below. Similarly, a demand trendline is drawn between a TD Point low (Point B) and the most recent prior TD Point low (point A) that is strictly less than point B; it may then extend to the right of point B. Notice
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Trendlines

TD Lines

that supply trendlines always slope down and demand trendlines always slope up. A given TD Point can be the right end of at most one TD Lines, but it can be the left end of several lines. Ordinarily, TD Points of any level can determine TD Lines, but optionally TD Points of less than a specified level may be disregarded in drawing lines. Also, the number of times that a TD Point is used as the left end of a line can be limited; in that case, any additional lower high/higher low TD Points will be matched to earlier TD Points. Optionally, a TD Lines can be declared invalid if the close of the bar just after point B breaks the line (is lower than the projected value of the line at that bar, for a demand line, or higher than the line, for a supply line). If this option is enabled, invalid lines are not drawn on the display. Once created, a TD Lines is extended to the right until the line is canceled, a TD Line Breakout occurs, or the right edge of the chart is reached. The breakout case is further subdivided into qualified and disqualified breakouts. The user must choose whether the terminate a line when a disqualified breakout occurs, or to continue it to the right. If a line is terminated at a disqualified breakout. It is drawn dotted or not at all. Grounds for cancellation of a TD Lines before TD Line Breakout are: 1. Breakout through an opposing TD Lines. A breakout is penetration of market price through the TD Lines; that is, high of a bar exceeds the calculated line value at that bar for a supply line, or low of a bar is less than the line value for a demand line. A breakout is recognized only when the price exceeds the line value by at least N ticks, for a breakout penetration parameter N. (If price exceeds the line by less than this, there is not breakout, and the TD Lines continues to be extended regardless of qualification conditions.) A breakout is qualified if one or more these conditions are true: 1. For an upside (supply breakout, the close prior to the breakout bar is a down close (strictly less than the close preceding it). For a downside breakout, the prior close is an up close (greater than the preceding close). 2. For an upside (Supply) breakout, the open of the breakout bar is above the TD Lines by at least N ticks (for a parameter-assignable N), and is also above the prior close. For a downside (demand)
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Trendlines

TD Lines

breakout, the open of the breakout bar is below the TD Lines by at least N ticks, and is also below the prior close. 3. An upside (supply) breakout is qualified if the demand value is less than the TD Lines value at the breakout bar by at least N ticks. The demand value is the close of the prior bar plus the difference between that close and the lesser of the low of that prior bar and the true low of the bar preceding it. A downside (demand) breakout is qualified if the supply value is greater than the TD Lines value at the breakout bar by at least N ticks (for a parameter-assignable N). The supply value is the close of the prior bar plus the difference between that close and the larger of the high of that prior bar and the true high of the bar preceding it (note this difference will be negative). If a qualified breakout occurs, the TD Lines is ended at that point, and a horizontal price-projection line is begun at the calculated predicted price. This line is then extended to the right until canceled or the right edge of the chart is reached. Grounds for cancellation of a price projection line are: 1. Breakout through an opposing TD Lines. 2. Price penetrates the projection line. The two conditions above are always checked. Three additional cancellation rules can be applied using the bar after a breakout. These three rules can be individually enabled or disabled. The price projection line is canceled if: 1. For an upside breakout, the open of the bar after the breakout bar is below the TD Lines value at that bar. For a downside breakout, the open of the bar after the breakout bar is above the TD Lines value. 2. For an upside breakout, the high of the bar after the breakout bar is less than the breakout bars close and the close of the bar after the breakout bar is below the TD Lines value at that bar. For a downside breakout, the low of the bar after the breakout bar is greater than the breakout bars close and the close of the bar after the breakout bar is above the TD Lines value at the bar.

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Trendlines

TD Lines

3. For an upside breakout, the high of the bar after the breakout bar is less than the breakout bars high. For a downside breakout, the low the bar after the breakout bar is greater than the breakout bars low. Price projections can be calculated by any of three methods: 1. For an upside breakout, find the lowest low during the interval from the TD Lines left anchor point to the breakout. Subtract this low from the TD Lines value at the bar containing the low. Add this difference to the TD Lines value at the breakout bar. For a downside breakout, find the highest high during the interval from the TD Lines left anchor point to the breakout. Subtract from this high the TD Lines value at the bar containing the high. Subtract this difference from the TD Lines value at the breakout bar. 2. For an upside breakout, find the lowest close during the interval from the TD Lines left anchor point to the breakout. Subtract the low of the bar containing the lowest close from the TD Lines value at that bar. Add this difference to the TD Lines value at the breakout bar. For a downside breakout, find the highest close during the interval from the TD Lines left anchor point to the breakout. Subtract from the high of that bar the TD Lines value at that bar. Subtract this difference from the TD Lines value at the breakout bar. 3. For an upside breakout, find the lowest low during the interval from the TD Lines left anchor point to the breakout. Subtract the close of the bar containing the lowest low from the TD Lines value at that bar. Add this difference to the TD Lines value at the breakout bar. For a downside breakout, find the highest high during the interval from the TD Lines left anchor point to the breakout. Subtract from the close of that bar the TD Lines value at that bar. Subtract this difference from the TD Lines value at the breakout bar. In all three cases, the difference added to or subtracted from the TD Lines value at the breakout bar is first multiplied by a scaling parameter (normally 100%).

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Trendlines

TD Lines

Additional notes: TD Lines and price projection lines will act like normal study lines in that their values at any particular bar can be read off on the Aspen cursor window. TD Point indicators appear only on the chart itself, and are ignored by the cursor. Parameter TD Points Status Function Determines whether TD Points are displayed. The default is Off, or not displayed. Selection is made from the Status menu:

TD Points H/L TD Points Level TD Points Uses TD Points Color TD Lines Status TD Lines Select

The On selection sets the respective field in the TD Line parameters menu to On. The Off selection sets the respective field in the TD Line parameters menu to Off. The Cancel selection returns you to the TD Line parameters menu without making any changes. Whether to use chart or true high/low to establish TD Points (default is use true High/Low). Minimum TD Point level to consider while making TD Lines (Default 1). Specifies the number of times a TD Point can be used to construct a TD Line. Determines the color in which to draw TD Point labels. Determines whether qualified TD Lines are displayed. Default is On, or displayed. Whether to display only supply TD Line, only demand TD Lines, or both. Default is Both, which displays both supply and demand lines. Other options are available through the Select menu:

The Both selection sets the respective field in the TD


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Trendlines

TD Lines

TD Lines Tick TD Lines Color Canceled Lines Status Canceled Lines Color Superseded Lines Status Superseded Lines Color Projections Status Projections Method

Line parameters menu to Both. The Supply selection sets the respective field in the TD Line parameters menu to Supply. The Demand selection sets the respective field in the TD Line parameters menu to Demand. The Cancel selection returns you to the TD Line parameters menu without changing the respective field. Number of ticks to penetrate TD Lines to register a breakout. Determines the color in which to draw TD Lines Determines whether to display disqualified TD Lines. The default is Off. Determines the color in which to draw disqualified TD Lines. The default is Gray. Determines the color in which to draw canceled TD Lines. Default is Off. Determines the color in which to draw canceled TD Lines. The default is Gray. Determines whether qualified TD Line Breakouts are displayed. The default is On, or displayed. Determines the techniques used to calculate the price objective. The default is 1, or method 1. Selections are made using the Method menu:

The methods are defines as follows: Method 1: calculates the difference between the TD Line and the extreme high/low price immediately above/below the TD Line. Method 2: calculates the difference between the TD Line and the close of the extreme high/low price immediately above/below the TD Line. Method 3: Calculates the difference between the TD Line and the extreme high/low close immediately above/below the TD Line.
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Trendlines

TD Lines

Projections Scale

Projections Color Validation Rule End at Breakout

Enables you to select a percentage of the value calculated by the Method used. The default percentage is 100%, or the difference itself. To change the scale, enter a value greater than 1. Enables you to change the color of projection lines. A specific price chart pattern which invalidates a TD point used for a TD Line due to steepness. The TD Line continues to search for a qualified breakout if this parameter is set to Qual. Set to Any, the study will terminate at the first breakout point. Default is Any. Determines whether the first breakout qualification rule is used. The default is On, or used. The first breakout rule is:

Brkout Qual Rule 1

The close of the bar prior to upside/downside penetration is down/up versus the close two bars ago. Brkout Qual Rule 2 Determines whether the second breakout qualification rule is used. The default is On, or used. The second breakout rule is:

The open of the breakout bar exceeds upside/downside the TD Line and also opens above/below the previous bars close. Brkout Qual Rule 3 Determines whether the third breakout qualification rule is used. The default is On, or used. The third breakout rule is:

The difference between the previous bars close and its true low/high added to/subtracted from the previous bars close is less than/greater than the TD Line. A true high is that bars high or the close of the previous bar, whichever is greater; a true low is that bars low or the close of the previous bar, whichever
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Trendlines

TD Lines

Brkout Pen Ticks 2 Brkout Pen Ticks 3 Qual Cancel 1

is less. Additional tick penetration required to qualify breakout. Additional tick penetration required to qualify breakout. Determines whether the first cancellation rule is used. The default is on, or used. The first cancellation rule is:

The TD Demand Line (up-sloping) breakout is canceled if the next bars high is less than the previous close and closes below the TD Demand Line; the converse applies for a TD Supply Line. Qual Cancel 2 Determines whether the second cancellation rule is used. The default is on, or used. The second cancellation rule is:

The TD Demand Line breakout is canceled if the price fails to make a higher high in the next bar; converse applies for a TD Supply Line. Qual Cancel 3 Determines whether the third cancellation rule is used. The default is on, or used. The third cancellation rule is:

Disqual Cancels 1 Disqual Cancels 2 Disqual Cancels 3

The TD Demand Line breakout is canceled if the next bars open is beneath the TD Demand Line and its close is below the TD Demand Line; converse applies for a TD Supply Line. Determines whether disqualified lines canceled using rule 1 are displayed. The default is On, or displayed. Determines whether disqualified lines canceled using rule 2 are displayed. The default is On, or displayed. Determines whether disqualified lines canceled using rule 3 are displayed. The default is On, or displayed.

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Trendlines

Trend Factors

Cancellation Rules
1. The TD Demand Line (up-sloping) breakout is canceled if the next bars high is less than the previous close and closes below the TD Demand Line; the converse applies for a TD Supply Line. 2. The TD Demand Line breakout is canceled if the price fails to make a higher high in the next bar; converse applies for a TD Supply Line. 3. The TD Demand Line breakout is canceled if the next bars open is beneath the TD Demand Line and its close is below the TD Demand Line; converse applies for a TD Supply Line.

Trend Factors
Trend Factors is designed to project upside resistance levels and downside support levels by multiplying qualified highs, lows, or closes by a series of prescribed ratios. Once the market has moved up approximately 1.0556 in price from a low, a reference high is identified. Place the study cross-reference on that high or high day close. The Trend Factors projects down to the support area of .9444, as well as secondary levels. Conversely, once a market has moved down to approximately .9444 in price from a high, a reference low is identified. Place the study crossreference on that low or low day close. The Trend Factors will project up to the resistance area of 1.0556, as well as secondary levels.

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Trendlines

Trend Factors

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Trendlines

Trend Factors

The study command for Trend Factors is .TDFACTOR.

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Trendlines

Trend Factors

Trend Factors Parameters

The Trend Factors study also has Date and Time parameters, which identify the date and time of the reference bar. As with any trend line drawing function, the process of drawing a Trend Factors study involves selecting a reference bar, and selection specifies the Date and Time parameters.

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Retracements

TD Retracement Arc

Retracements
Several DeMark studies are available through the trend lines feature. These studies include: TD Relative Retracement TD Absolute Retracement TD Factor (Trend Factors) TD Arc.

TD Retracement Arc
TD Retracement Arc displays graphically support and resistance levels which are defined by incorporating both price and time to establish retracement levels.

The TD Arc study is an Aspen trendline draw function. Selecting TD Arc from the Trendline Functions menu prepares the trendline cursor to draw the TD Arc retracement. Clicking on a bar in the chart defines an anchor point, or reference bar, for the retracement. The retracement lines can be modified or deleted in the same way as other Aspen trendlines, and their respective retracement levels are
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Retracements

TD Retracement Arc

available in the cursor window. A click is assumed to refer to the high, low, open, or close of a displayed bar; the software locates the nearest such point and uses it as the exact reference point. To be more precise, the software first finds the horizontally nearest bar column, then chooses the vertically closest reference point within that column. If multiple data items are on display, the one with the vertically closest reference point is chosen. (Formula data items are not eligible to be chosen.) Only high and low points are eligible.

TD Retracement Arc Parameters

The TD Retracement Arc study also has Date and Time parameters, which identify the date and time of the reference bar. As with any trend line drawing function, the process of drawing a TD Retracement Arc study involves selecting a reference bar, and selection specifies the Date and Time parameters. TD Retracement Arc draws elliptical trendline curves. The anchor point and magnet price are determined in the same way as for Relative Retracement. Also, the software calculates the distance (number of bars) from the anchor bar to the high or low bar whose close determines the magnet price. Then, the trendline curve for fraction F is a segment of a quarter ellipse starting horizontally at the anchor point, and ending vertically at price:
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Retracements

Relative Retracement

The trendline curve terminates early if it touches a price bar before reaching the end point.

Lines Parameters in TD Retracement Arc


The defaults vary. Set to On, a retracement level is drawn. Set to Off, the respective retracement level is suppressed.

Scale Parameter in TD Retracement Arc


The Scale field enables you to adjust the shape of the ellipse drawn by the TD Retracement Arc. This field applies only to the TD Retracement Arc.

Relative Retracement
TD Relative Retracement is a purely objective or mechanical method for displaying Fibonnaci retracement levels from designated lows and highs. These levels define areas of support or resistance. Retracement levels will appear as dashed lines until price penetrates them and is preceded by a qualified bar. Retracement levels are calculated as follows: from a low bar, refer to the last time a lower bar appeared and select the highest high between these two points and subtract the difference between those two points or from a high bar, refer to the last time a higher bar appeared and select the lowest low between these two points. By placing the cursor on these lows or highs and by selecting the desired Retracement settings, the levels are presented graphically.

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Retracements

Relative Retracement

The Relative Retracement study is an Aspen trendline draw function. Selecting TD Relative Retracement from the Trendline Functions menu prepares the trendline cursor to draw the Relative Retracement. Clicking on a bar in the chart defines an anchor point, or reference bar, for the retracement. The retracement lines can be modified or deleted in the same way as other Aspen trendlines, and their respective retracement levels are available in the cursor window. A click is assumed to refer to the high, low, open, or close of a displayed bar; the software locates the nearest such point and uses it as the exact reference point. To be more precise, the software first finds the horizontally nearest bar column, then chooses the vertically closest reference point within that column. If multiple data items are on display, the one with the vertically closest reference point is chosen. (Formula data items are not eligible to be chosen.) Only high and low points are eligible.) The study command for Range Expansion Index is .TDREI. For further information on Relative Retracement, please refer to Thomas R.
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Retracements

Relative Retracement

DeMark, The New Science of Technical Analysis, New York: John Wiley & Sons, 1994, Chapter 2.

Qualifying Relative Retracement


By qualifying a retracement level, the probability of identifying a successful intraday breakout is enhanced if any of the following occur: 1. The close of the prior bar to the upside (downside) penetration is down (up) versus the close two bars ago, OR 2. The open of the first bar exceeds upside (downside) the retracement level, OR 3. The difference between the previous bars close and its true low (true high and close) added to (subtracted from) the previous bars close is less than (greater than) the retracement level. A true high is that bars high or the close of the previous bar, whichever is greater. A true low is that bars low or the close of the previous bar, whichever is lesser.

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Retracements

Relative Retracement

Relative Retracement Parameters

The TD Relative Retracement study also has Date and Time parameters, which identify the date and time of the reference bar. As with any trend line drawing function, the process of drawing a Relative Retracement study involves selecting a reference bar, and selection specifies the Date and Time parameters. This trendline type draws one or more horizontal lines representing fractional retracements of a prior price excursion. Given a selected high or low (opens and closes are not eligible anchor points for this study), the software looks back for a prior bar having a higher high or a lower low, respectively. If no such bar is found on the portion of the displayed chart, no line is drawn because the software does not look at the data that is not displayed. Having found such a bar, all the bars between that bar and the anchor point bar (inclusive) are scanned to find the bar having the lowest low (if a high anchor) or highest high (if a low anchor). The close of that bar is taken as the magnet price. A trendline is drawn from the anchor point bar rightwards to the end of the visible chart or until one of these conditions occurs:

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Retracements

Absolute Retracement

1. The trendline is penetrated by a price bar (price falls below the trendline, in the case of a trendline below the anchor price, or exceeds the line, in the case of a line above the anchor price). Penetration must be by at least N ticks, for selectable N. Optionally, penetrations may terminate the line only if they are qualified, using the same three rules that qualify breakouts for TD Lines. As with TD Lines, the three TD Retracement Qualifier conditions can be individually enabled or disabled, and separate penetration distances are supplied for TD Retracement Qualifier rules 2 and 3. 2. The trendline is canceled according to one of the same three optional cancellation rules available for TD Lines. Trend Line options include: 1. Number of ticks needed to penetrate trendline. 2. Whether to continue past disqualified breakouts. 3. Enable/disable three TD Retracement Qualifier conditions (as per TD Lines) 4. TD Retracement Qualifier penetration parameters as per TD Lines. 5. Enable/disable three cancellation conditions (as per TD Lines). 6. For each fraction level, whether to draw a line and a line color.

Lines Parameters in Relative Retracement


The defaults vary. Set to On, the retracement level is drawn. Set to Off, the retracement level is suppressed. 0.000 is the Magnet Line of the high bar close/low bar close.

Absolute Retracement
Absolute Retracement is applied once a markets price advance is at an all-time high or low. Consequently, Relative Retracement cannot be used since there exists no reference point historically. Absolute Retracement is applied to the high bar/low bar. Retracement ratios will be displayed to the downside/upside and can be used as support levels/resistance levels.

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Retracements

Absolute Retracement

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Retracements

Absolute Retracement

The Absolute Retracement study is an Aspen trendline draw function. Selecting TD Absolute Retracement from the Trendline Functions menu prepares the trendline cursor to draw the Absolute Retracement. Clicking on a bar in the chart defines an anchor point, or reference bar, for the retracement. The retracement lines can be modified or deleted in the same way as other Aspen trend lines, and their respective retracement levels are available in the cursor window. A click is assumed to refer to the high, low, open, or close of a displayed bar; the software locates the nearest such point and uses it as the exact reference point. To be more precise, the software first finds the horizontally nearest bar column, then chooses the vertically closest reference point within that column. If multiple data items are on display, the one with the vertically closest reference point is chosen. (Formula data items are not eligible to be chosen.) Only high and low points are eligible. For further information on Absolute Retracement, please refer to Thomas S. DeMark, The New Science of Technical Analysis, New York: John Wiley & Sons, 1994, Chapter 2, Retracements.

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Retracements

Absolute Retracement

Absolute Retracement Parameters

The Absolute Retracement study also has Date and Time parameters, which identify the date and time of the reference bar. As with any trend line drawing function, the process of drawing a Absolute Retracement study involves selecting a reference bar, and selection specifies the Date and Time parameters. The Absolute Retracement is similar to the Relative Retracement study except that no search for a prior high/low occurs; instead, the retracement lines are drawn at absolute multiples of the anchor price. Allowable multiples are 0.382, 0.618, 1.382, 1.618, and 2.618. All else is the same as relative retracement.

Lines Parameters in Absolute Retracement


The defaults vary. Set to On, the retracement level is drawn. Set to Off, the retracement level is suppressed.

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Overbought/Oversold

Range Expansion Index

Overbought/Oversold
DeMark overbought/oversold studies attempt to identify zones of high- and low-risk buying opportunities. Overbought/Oversold studies include: Range Expansion Index, Range Expansion Breakout, and DeMarker Indicator.

Range Expansion Index


The Range Expansion Index (REI) identifies areas of price exhaustion generally associated with price peaks and troughs. This indicator is selective in the sense that it compares current price activity with recent price movement, but it ignores breakaway price moves until its steepness begins to dissipate. For better results, if the number of bars outside the band is 5 or fewer, a potential top or bottom has been formed. Generally. this is confirmed once a down/up close versus the previous days bar is recorded.

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Overbought/Oversold

Range Expansion Index

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Overbought/Oversold

Range Expansion Index

The study command for Range Expansion Index is .TDREI. For further information on Range Expansion Indicator, please refer to Thomas R. DeMark, The New Science of Technical Analysis, New York: John Wiley & Sons, 1994, Chapter 3, Overbought/Oversold.

Range Expansion Index Parameters

The Range Expansion Indicator will turn from black to white when it moves from an oversold to an overbought zone; it turns blue when it moves back to an oversold
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Overbought/Oversold

Range Expansion Index

zone. This study draws a graph of range expansion values, which fluctuate between +100 and -100. It would typically be drawn in its own chart subwindow. Optionally, dotted reference lines can be drawn at user-set values, but these lines do not affect the calculation or display of the REI line itself. Field Description Field Function The description field lists the study elements in the REI. There are three study elements in the Range Expansion Index: TD REI The studys green line. Ref A The upper reference line. Ref B The lower reference line. Default is On. Set to On, reference lines are drawn. Set to Off, reference lines are suppressed. Options are selected using the Status menu, which controls whether the reference lines in the Range Expansion Index study are displayed.

Status Field

Avg. Type Field

Selecting Off suppresses both lines. Selecting On displays both lines. Displays the operative moving average calculation. Selecting the moving average type displayed in the field displays the Avg. Type menu:

The Simple selection causes the Simple moving average calculation to be used in calculating the study. The Modified
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Overbought/Oversold

Range Expansion Index

Period Parameter Compare Field Check Field

selection causes the Modified moving average calculation to be used in calculating the study. The Exponential selection causes the Modified moving average calculation to be used in calculating the study. The Weighted selection causes the Weighted moving average calculation to be used in calculating the study. The Hamming selection causes the Hamming moving average calculation to be used in calculating the study. Default is 5 periods. Defines the number of time periods. Specifies the number of bars to survey. The default is 2, or two bars back. Specifies the distance (in bars) to the bar or bars (as set in the Compare field) used for comparison. Specifies the operator used to make comparisons. The default is On, which means equality is on (greater than or equal / less than or equal to). Set to off, comparison is made as strictly greater than or strictly less than:

Equal Field

ON = >= / <= Ref Field Color Field OFF= > / < Default is 45 for the Ref A, and -45 for Ref B. The reference lines specify band levels for overbought/oversold conditions. Default is Green. Selecting any of the value in this field displays the Color menu. Choosing an alternative color from the menu changes the color of the respective study element.

Graph Field

Default is Line. Selecting any of the values in this field displays the Graph menu. Choosing an alternative selection from the menu changes the rendering of the respective study element.
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Overbought/Oversold

Range Expansion Breakout

The Bars selection renders the study element as bars. The Line selection renders the study element as a line. The Histogram selection renders the study element as a histogram. The Dots selection renders the study element as larger dots. The Dotted selection renders the study element as smaller dots. The Not Drawn selection suppresses the study element.

Range Expansion Breakout


This study identifies high and low breakout values for the next bar of a series. A short horizontal line is drawn at the projected breakout high and low. The default chart position will shift left a bar when this study is active.

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Overbought/Oversold

Range Expansion Breakout

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Overbought/Oversold

Range Expansion Breakout

The projections for a bar are based on the price activity immediately preceding bar or series of bars. The price is the previous bars close, or current bars open (or other user-selectable price). The range is either the previous bar or series of bars. The factor is userselected. The user may compute and draw projections for all bars or for only the current and succeeding bars. The study command for Range Expansion BreakOut is .TDREBO.

Range Expansion BreakOut Parameters

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Overbought/Oversold

Range Expansion Breakout

Field Movement Field

Function Lists the two elements, or movements, of the Range Expansion BreakOut Study. Up Displays the parameters for the Top mark Down Displays the parameters for the Bottom mark Default is 1. Determines the number of periods, or preceding bars, surveyed to calculate the breakout. Default is Average. Enables you to select specifications for the bar(s) used to calculate the breakout. Selecting the value in this field displays the Range Menu:

Period Parameter Range Field

C/T Field

The default is True High. Enables you to select the Chart or the True High. Selecting this field displays the C/T menu:

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Overbought/Oversold

Range Expansion Breakout

Factor Field

Enables you to enter a scale factor. The default scale factor is 0.618; other recommended factors include:

0.382 0.618 1.0 1.382 1.618 Display Parameter Displays the Plot At menu, which enables you to choose where on the chart you want the study displayed.

Base Field

The default is Current (current bar). Displays the Price menu, which displays a set of prices available to serve as the Center price for the projection.

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Overbought/Oversold

Range Expansion Breakout

Color Field

The default is Prev Close, or previous close. Enables you to change the colors for the respective study elements.

User Quals Parameters


This section of the parameters menu contains customizable qualifiers that help perfect breakout prices. Field Status Field Price (1) Field Function Specifies whether the respective user qualification is on or off. The default is off, or not used. Selection is made using the Status menu. Specifies the first comparison price in the respective user qualification. The default is Close. Selection is made using the Price (Upside/Downside) menu:

Ago (1) Field Compare Field

Specifies the number of bars to survey to identify the selected price. The default is 1, or one bar back. This value is adjusted using the edit box. Specifies the comparison operator used in the respective user qualification. The default is <, or less than. Selection is made using the Comparison (Upside/Downside) menu:
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Range Expansion Breakout

Price (2) Field

Specifies the second comparison price in the respective user qualification. The default is Close. Selection is made using the Price (Upside/Downside) menu:

Ago (2) Field Join Field

Specifies the number of bars to survey to identify the selected price. The default is 1, or one bar back. This value is adjusted using the edit box. Specifies the Boolean operator used to join multiple user qualifications. The default is AND, which means all user qualifications must be true. Selection is made using the User Quals joined by menu:

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Overbought/Oversold

DeMarker Indicator

Selecting the OR operator means that any user qualification must be true.

DeMarker Indicator
The DeMarker Indicator identifies potential price bottoms and tops. It accomplishes this by making price comparisons from one bar to the next and measuring the level of price demand.

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Overbought/Oversold

DeMarker Indicator

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Overbought/Oversold

DeMarker Indicator

The study command for DeMarker Indicator is .TDDMI. For further information on the DeMarker Indicator, please refer to Thomas R. DeMark, The New Science of Technical Analysis, New York: John Wiley & Sons, 1994, Chapter 3, Overbought/Oversold.

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Overbought/Oversold

DeMarker Indicator

DeMarker Indicator Parameters

This study draws a graph of DMI values, which fluctuate between 0 and 100. Optionally, dotted reference lines can be drawn at user-set values, but these lines do not affect the calculation or display of the DMI line itself. The DMI computes two values at any given bar:

( ) DMILow = MAX( Low[ k bars ago] Low,0)


DMIHigh = MAX High High[ K bars ago] ,0 The final DMI study value is then computed as an N-bar moving average of DMI High, divided by an N-bar moving average of (DMIHigh+DMILow), and multiplied by 100 to give a result in the desired range. The type and length of the moving averages are selectable. DMI outputs a gap at any gap bar, but gap bars are ignored in counting back from a non-gap bar. Field Description Field Function Lists the three elements of the DeMarker Indicator study: TD DMIThe DeMarker Indicator line. Ref A The upper reference line. Ref B The lower reference line. Default is On. Determines whether Reference Line A is displayed. Default is Simple. Determines which moving average
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Status Field Avg. Type Field


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Overbought/Oversold

DeMarker Indicator

Period Parameter Compare Field Ref Field

calculation is used to calculate the DMI. Specifies the number of periods calculated in the moving average. The default is 8.0. Comparison distance, in bars. The default is 1, or 1 bar. Specifies the band parameters for overbought/oversold conditions. Defaults are 63.0 for the upper band and 37.0 for the lower band.

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D-Wave

DeMarker Indicator

D-Wave
D-Wave is an objective form of wave analysis. It defines price waves mechanically. D-Wave uses patterns that are defined by a series of Fibonnaci highs and lows. This approach makes D-Wave objective, e.g., Wave 1 could be identified as an 8 bar high, a high higher than all previous 7 bars highs. The succeeding waves 2, 3, 4, and 5, as well as the correction waves, use Fibonnaci numbers.

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D-Wave

DeMarker Indicator

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D-Wave

DeMarker Indicator

D-Wave displays waves according to the following logic: For Up-Waves, High of 1 is less than the low of 4, and High of 1 is less than the high of 3, and High of 3 is less than the high of 5. For Down-Waves, Low of 1 is greater than the high of 4, and Low of 1 is greater than the low of 3, and Low of 3 is greater than the low of 5. Level Wave Start Wave 1 Wave 2 Wave 3 Wave 4 Wave 5
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Price 21 Low 8 High 5 Low 13 High 8 Low 21 High


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D-Wave

D-Wave Parameters

Wave A Wave B Wave C

13 Low 8 High 21 Low

Reverse logic for sells. The study command for D-Wave Analysis is .TDWAVE. For further information on D-Wave, please refer to Thomas R. DeMark, The New Science of Technical Analysis, New York: John Wiley & Sons, 1994, Chapter 4, Wave Analysis.

D-Wave Parameters

This study identifies D-Wave. The wave counts drawn above or below the high or low of each key bar of the pattern. (D-Wave values do not appear in the cursor window.) Each wave is defined by relationships between highs and lows. If an up-wave search is requested, the start section is required to end on a price less than the preceding prices; then the next section ends on a price greater than preceding prices; and subsequent sections alternate less than and greater than conditions. A down-wave ends on a greater-than condition, and subsequent sections alternate less-than and greater-than conditions. The first, or start section is labeled with an S; the remaining sections are labeled with 1, 2, 3, 4, 5, A, B, and C. Each label is drawn above its bar
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D-Wave

D-Wave Parameters

when the price condition is greater-than, below its bar when the price condition is less-than. When the peak check option is selected, section endpoints are required to have prices above or below prior prices as follows. (None of the tests defined in the next two paragraphs are applied if peak check is off.) For an up wave, point 3 must have a price greater than the highest high between points 1 and 2 inclusive, and point 5 a price greater than the highest high between points 3 and 4 inclusive. An L-bar high that is not higher than the preceding high price is ignored, and the section continues. Furthermore, the lowest low price between points 2 and 3 inclusive must be greater than the lowest low between points S and 1 inclusive, and the lowest low between points 4 and 5 must be greater than the lowest low between points 2 and 3. If either of these latter two conditions are violated, the up-wave formation is aborted, and a search for a new S point begins following point 2 or 4 respectively. Finally, point C is not recognized until it has a price less than the lowest low between points A and B inclusive. For a down wave, the tests are reversed. Point 3 must have a price less than the lowest low between points 1 and 2 inclusive, and point 5 a price less than the lowest low between points 3 and 4 inclusive. Furthermore, the highest high between points 2 and 3 inclusive must be less than the highest high between points S and 1 inclusive, and the highest high between points 4 and 5 must be less than the highest high between points 2 and 3. If either of these latter two conditions are false, the downwave formation is aborted, and a search for a new S point begins following point 2 or 4 respectively. Finally, point C is not recognized until it has a price greater than the highest high between points A and B inclusive. The user can select the length and highest high/lowest low price for each section of the wave. In addition to the usual High, Low, Close price options, select a High if Up wave, Low if Down wave and Low if Up wave, High if Down wave choices; these will allow building symmetrical wave definitions. You need to select the period to display the D-Wave. Please note that the wave only considers bars displayed in the chart. Once the wave counts are defined, the user is able to make price projections using a multiplier, which is accessible in the multiplier field. The study command for TD Wave is .TDWAVE. Field Description Field
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Function Lists the elements in the D-Wave study:


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D-Wave

D-Wave Parameters

Direction Field

D-Wave Indicates which kind of waves are displayed by the D-Wave Analysis study (the default is Up). Selecting the word in the Direction field displays the Up/Down menu:

Peak Check Field

Selecting Up causes the D-Wave Analysis study to display only up waves; selecting Down causes the study to display only down waves. Whether to enable peak value checks. Selecting the word in this field displays the Status menu. The default is On

Color Field

Segment Field

Length Field

Indicates the color used to render all labels. Selecting the word in this field displays the Color menu, which enables you to change the color of all labels. The default color for all labels is Green. Start 1 2 3 4 5 A B C Identifies the Length of the respective study element. Defaults are as follows: Start 1 2 3 4 21 8 5 13 8
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D-Wave Parameters

Price Field

5 21 A 13 B 8 C 21 Indicates the price used to calculate the D-Wave Analysis study. Selecting a word in the price field displays the Price menu. Defaults for the different study elements are as follows: Start 1 2 3 4 5 A B C Low/Up, High/Down High/Up, Low/Down Low/Up, High/Down High/Up, Low/Down Low/Up, High/Down High/Up, Low/Down Low/Up, High/Down High/Up, Low/Down Low/Up, High/Down

Selections are made using the Price menu, which contains the following selections:

Prediction Field Base Field

Determines whether the D-Wave prediction is displayed. The default is On, or displayed. Selection is made using the Status menu. Specifies the Base for the D-Wave prediction. The default is Start. Selection is made using the Base menu:

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D-Wave

D-Wave Parameters

Multiplier Field

Specifies the Multiplier used in the D-Wave prediction. The default is 1.618. Selection is made using the Multiplier menu.

Start Field

Specifies the starting segment for the D-Wave prediction. The default is Start. Selection is made using the Start menu.

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D-Wave

D-Wave Parameters

End Field

Specifies the ending segment of the D-Wave prediction. The default is 1. Selection is made using the End menu.

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Moving Averages

TDMA I

Moving Averages
DeMark moving average studies introduce unconventional calculation techniques designed to counteract the problem inherent in all moving average approaches: trading range and sideways markets. Studies: TDMA I TDMA II TD Channel I TD Channel II TD Channel III

TDMA I
TDMA I displays the moving average of highs and/or lows beginning with the current bar. The moving averages only appear once a new high bar or new low bar exceeds all highs/lows of a selected range of bars. TDMA I is helpful as an exit or as a stop loss indicator.

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Moving Averages

TDMA I

The study command for TDMA I is .TDMA1. For further information on TDMA I, please refer to Thomas R. DeMark, The New Science of Technical Analysis, New York: John Wiley & Sons, 1994, Chapter 6, Moving Averages.

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Moving Averages

TDMA I

TDMA I Parameters

This study draws interrupted moving average lines. Two moving averages are drawn, but only when particular conditions hold. Moving average A is computed on the High prices (actually on any selectable price, but High would typically be used). Moving average B is computed on the Low prices (again selectable). Moving average type and length are selectable, but the same type and length parameters are used for both A and B. The averages are computed continuously (this makes a difference for exponential averages, for example). But they are drawn only in intervals determined by the following conditions. A count parameter C and a length parameter L are used. Line A begins to be drawn whenever the High price is strictly less than all C-1 preceding Highs. The line continues to be drawn while this condition remains true, and for L-1 additional bars when it ceases to be true. (No gap occurs if the condition becomes true again within L bars.) Line B begins to be drawn whenever the Low price is strictly greater than all C-1 preceding Lows. The line continues to be drawn while this condition remains true, and for L-1 additional bars when it ceases to be true. Two scaling factors are provided, each of which scales the values of one line by an absolute multiple. In addition, a projection (Proj.) factor is provided. This shifts the output to the right by X percent of the moving average length (rounded to the nearest integer number of bars). Both the MA computations and the determination of the drawing intervals are done in sync with the input data; the TD Price Projector simply delays the final output by some number of bars. Field Description Field Function Lists the elements of the TD MA1 study: Average A
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Moving Averages

TDMA I

Avg. Type Field Period Field Count Field Length Field Proj Field Price Field

Average B Enables you to change the moving average calculation for Average A. The default is simple. Selecting the word in the field displays the Avg. Type menu. Specifies the number of periods used to calculate the moving average for Average A. The default is 3 periods. Specifies the number of periods the average will render once a new high or low is reached. The default is 13. Specifies the period for which the moving average displays. The default is 4. Specifies the percentage the moving average can extend into the future. The default is 0.0. Displays the Price menu, from which alternative prices can be chosen for calculating the moving average for both Average A and Average B. The Price menu contains the following selections:

Scaling Field

The H, L Midpt Selection selects the mid-point of the high and low prices as the price used to calculate the respective study element. The H, L, C Avg Selection selects the average of the high, low, and close prices as the price used to calculate the respective study element. The Tick Average Selection selects the average of the ticks that comprise a bar as the price used to calculate the respective study element. The First Study selection selects the value of the first study in the chart window as the price used to calculate the respective study element. High Factor specifies the multiplier applied to Average A. The default is 100. Low Factor specifies the multiplier applied to Average B. The default is 100.

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Moving Averages

TDMA II

TDMA II
TDMA II is a series of two moving averages. It is displayed unlike other moving averages. Each moving average is compared to its value X bars earlier and each will turn blue if ascending and red if descending.

The study command for TDMA II is .TDMA2.

TDMA II Parameters

This study draws two-color moving average lines. Each moving average is computed and drawn independently.

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Moving Averages

TD Channel I

Each moving average is an ordinary moving average of specifiable type and length, computed on a specifiable price selector. An absolute scaling percentage and a projection percentage can also be selected; these have the same meaning as for TDMA I. In addition, a comparison length X is calculated for each moving average. The moving average line is drawn in one color when its current value is greater than its value of X bars ago; otherwise it retains its original color. Field Description Field Function Lists the study elements in TD MA2, of which there are two: Average A Average B Specifies which moving average calculation the study uses. Selecting the word in this field displays the Avg. Type menu, from which you can select an alternative moving average calculation. The default is Simple. Number of periods, respectively, used to calculate the moving averages. Default for Average A is 13. Default for Average B is 55. Specifies the bar used for comparison. The default for both averages is 1, or one bar back. Specifies the multipliers applied to the high/low of the moving average,. The default for both averages is 100%. Specifies the percentage that the respective average can be extended into the future. Default for both averages is 0.0. Specifies the price used for comparison. Selecting the word in this field displays the Price menu, from which you can select an alternative comparison price. Default for both averages is Close. Indicates the color of the respective average. Selecting the word in this field displays the Color menu, from which an alternative color can be selected. Default for Average A is Green. Default for Average B is Red. Indicates the rendering method of the respective average. Selecting the word in this field displays the Graph menu. Default for both averages is Line.

Avg. Type Field

Period Field Length Field Scaling Field Proj Field Price Field

Color Field

Graph Field

TD Channel I
TD Channel I represents the markets tendency to trade within a price band.

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TD Channel I

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Moving Averages

TD Channel I

The extremes are defined as: High band1.12% above the 3 day moving average of the lows. Low band.988% above the 3 day moving average of the highs. The study command for Channel 1 is .TDCH1.

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Moving Averages

TD Channel I

TD Channel I Parameters

This study draws channel lines above and below the price action. The computation is simply a pair of independent moving averages applied to selectable price values, multiplied by an absolute scaling percentage, and optionally offset by a given number of bars. The study command for Channel 1 is .TDCH1. Field Description Field Function Lists the study elements in TD Channel I, of which there are two: Top Channel Bottom Channel Indicates the moving average calculation used to plot the respective study element. Selecting the word in this field displays the Avg. Type menu, which enables you to select an alternative moving average calculation. The default for both elements is Simple. Indicates the number of periods used in calculating the respective study element. The default for both study elements is 3. Indicates the scaling factor, or moving average multiplier, for the respective study element. The default for the Top Channel is 103.0; for the Bottom Channel, the default is 97.0. Indicates how many bars the respective study element has been shifted, forward or backward in time (positive numbers are future, negative are past). The default for both study elements is 0.0, or no shift. For the respective study element, the word in this field Indicates the price that is multiplied by the ratio. Selecting the word in this field displays the Price menu, from which you can choose an alternative price. The default for the Top
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Avg. Type Field

Period Field Scaling Field Shift Field

Price Field

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Moving Averages

TD Channel II

Color Field

Graph Field

Channel is Low. The default for the Bottom Channel is High. Indicates the color in which the respective study element is rendered. Selecting the word in this field displays the Color menu, which enables you to choose an alternative color. The default for the Top Channel is Green. The default for the Bottom Channel is Red. Indicates the rendering method for the respective study element. Selecting the word in this field displays the Graph menu, from which you can select an alternative rendering method. The default for both study elements is Line.

TD Channel II
TD Channel II represents the markets tendency to trade within a price band.

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Moving Averages

TD Channel II

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Moving Averages

TD Channel II

The extremes are defined as: High band1/2 of 1% above the 3 day moving average of the highs. Low band1/2 of 1% below the 3 day moving average of the low. The study command for Channel 2 is .TDCH2.

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Moving Averages

TD Channel II

TD Channel II Parameters

This study is absolutely identical to TD Channel 1 except that it employs different default values. The study command for Channel 2 is .TDCH2. Field Description Field Function Lists the study elements in the TD Channel 2, of which there are two: Top Channel Bottom Channel Indicates the moving average calculation used to plot the respective study element. Selecting the word in this field displays the Avg. Type menu, which enables you to select an alternative moving average calculation. The default for both elements is Simple. Indicates the number of periods used in calculating the respective study element. The default for both study elements is 3.0. Indicates the scaling factor, or moving average multiplier, for the respective study element. The default for the Top Channel is 100.50; for the Bottom Channel, the default is 99.50. Indicates how many bars the respective study element has been shifted, forward or backward in time (positive numbers are future, negative are past). The default for both study elements is 0.0, or no shift. For the respective study element, the word in this field Indicates the price that is multiplied by the ratio. Selecting the word in this field displays the Price menu, from which you can choose an alternative price. The default for the Top Channel is High. The default for the Bottom Channel is Low. Indicates the color in which the respective study element is rendered. Selecting the word in this field displays the Color
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Avg. Type Field

Period Field Scaling Field Shift Field

Price Field

Color Field
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Moving Averages

TD Channel III

Graph Field

menu, which enables you to choose an alternative color. The default for the Top Channel is Green. The default for the Bottom Channel is Red. Indicates the rendering method for the respective study element. Selecting the word in this field displays the Graph menu, from which you can select an alternative rendering method. The default for both study elements is Line.

TD Channel III
Channel III represents the markets tendency to trade within a price band.

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TD Channel III

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TD Channel III

The extremes are defined as: Upper banda 3 day moving average of the median (middle) high of the last five days. Lower banda 3 day moving average of the median (middle) low of the last five days. The study command for Channel 3 is .TDCH3.

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TD Channel III

TD Channel III Parameters

This study draws Channel lines above and below the price action. A pair of independently computed lines are drawn. The calculation for each line is identical except for the price selector. For each bar, the median price over X bars is calculated (the middle value among that bars price and the preceding X-1 non-gap prices; if X is even, take the average of the two middle prices). Then perform an N-bar moving average calculation on the median-price series. The output series can optionally be delayed (offset) by a specified number of bars. The study command for Channel 3 is .TDCH3. Field Description Field Function Lists the study elements in the TD Channel 3, of which there are two: Top Channel Bottom Channel Indicates the moving average calculation used to plot the respective study element. Selecting the word in this field displays the Avg. Type menu, which enables you to select an alternative moving average calculation. The default for both elements is Simple. Indicates the number of periods used in calculating the respective study element. The default for both study elements is 3.0. Indicates the median for the respective study element. The default for both elements is 5. Indicates the scaling factor, or moving average multiplier, for the respective study element. The default for the Top Channel is 101.5; for the Bottom Channel, the default is 98.5. Indicates how many bars the respective study element has
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Avg. Type Field

Period Field Median Field Scaling Field Shift Field


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Moving Averages

TD Channel III

Price Field

Color Field

Graph Field

been shifted, forward or backward in time (positive numbers are future, negative are past). The default for both study elements is 0, or no shift. For the respective study element, the word in this field Indicates the price that is multiplied by the ratio. Selecting the word in this field displays the Price menu, from which you can choose an alternative price. The default for the Top Channel is High. The default for the Bottom Channel is Low. Indicates the color in which the respective study element is rendered. Selecting the word in this field displays the Color menu, which enables you to choose an alternative color. The default for the Top Channel is Green. The default for the Bottom Channel is Red. Indicates the rendering method for the respective study element. Selecting the word in this field displays the Graph menu, from which you can select an alternative rendering method. The default for both study elements is Line.

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Sequential

TD Channel III

Sequential
Sequential is a series of studies designed to identify price exhaustion peaks and troughs. A series of price comparisons are made to identify these prospective turning points. Sequential is a pattern recognition technique designated to identify both high risk and low risk entry zones. This approach is contratrend since it anticipates areas of price exhaustion which often occur just prior to, or coincident with, price turning points. There are two components to Sequential: the Setup and the Countdown phases. Whereas minor price reversals are generally associated with the completion of Setup, major turning points are typically identified upon completion of Countdown.

A low risk Setup is a series of X consecutive trading bar closes less than the close Y trading bar closes earlier. These are displayed on a chart with blue numbers positioned beneath each respective bar. Conversely, a high risk Setup is a series of X consecutive trading bar closes greater than the close Y trading bar closes
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Sequential

Sequential Parameters

earlier. These are displayed on a chart with red numbers positioned above each respective bar. The command for Sequential is .TDSEQUENTIAL. For further information on Sequential, please refer to Thomas R. DeMark, The New Science of Technical Analysis, New York: John Wiley & Sons, 1994, Chapter 7, Sequential.

Sequential Parameters
For all Sequential studies, the following parameters can be set. Parameter User Quals Field Status Field 2 Function Lists the available user qualifications that govern cancellation. There are 10 available qualifications you can define, named Qual 1 to Qual 10. See, Qualifying Sequential. Indicates whether the user qualification is in effect, that is, whether it is currently being applied. The default is Off. Selecting any word in this field displays the Status menu, which enables you to change the state. Indicates the price used as a basis for comparison in defining a user qualification. The default is Low. Selecting the value in this field displays the Price menu, which enables you to select an alternative basis price. The Price menu contains the following selections:

Price Field 2

Bar Field Of Field

Specifies the basis reference bar. The default is 1, or one bar back. Indicates whether the user qualification applies to Setup or Cntdn (Countdown). The default is Setup. Selecting this word displays the Section menu, which enables you to change this setting. The section menu contains the following selections:

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Sequential

Sequential Parameters

Buy Rel Field

Setup allows display of the Setup only. Cntdn allows display of the Countdown only. Specifies the operator that defines the user qualifications comparison. The default is < (less than). Selecting the operator in this field displays the Rel menu, which enables you to choose an alternative operator for the respective user qualification. The Rel menu contains the following selections:

Price Field 3

Bar Field 2 Of Field 2

< Less Than <= Less Than or Equal To > Greater Than >= Greater Than or Equal To Indicates the price that is compared to the basis price (which is specified in the other Price field). The default is Low. Selecting the value in this field displays the Price menu, which enables you to select an alternative basis price. Specifies the bar compared to the basis reference bar (which is specified in the other Bar field). The default is 1, or one bar back. Indicates whether the user qualification applies to Setup or Cntdn (Countdown). The default is Setup. Selecting this word displays the Section menu, which enables you to change this setting.

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Sequential

Setup Parameters

Setup Parameters

Prior to completion of Setup, the Setup must be perfected or qualified by successfully fulfilling a process called Intersection. Countdown will not commence until Intersection has been completed. Intersection occurs for a low risk Setup once the high of bar eight (8) or of bar nine (9) or the first subsequent bar to any standard nine (9) bar Setup is greater than or equal to the low of any bar three of more bars earlier up to and including the first bar of the Setup. Conversely, Intersection occurs for a high risk Setup once the low of bar eight (8) or of bar nine (9) or the first subsequent bar to any standard nine (9) bar high risk Setup is less than or equal to the high of any bar three or more bars earlier up to and including the first bar of the Setup.

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Sequential

Setup Parameters

Parameter Description Field

Function Lists the elements in the Sequential study, of which there are five: 1. Setup 2. Intersection 3. Countdown 4. Cancel Cond 5. Recycle

Length Parameter Period Parameter Price Parameter

Equality Parameter

Color Parameter

This selection determines the number of consecutive trading bar comparisons required to establish the Setup. The default is 9. Identifies the specific reference bar used to establish the Setup. The default is 4, which specifies that the fourth bar back is the reference bar. Determines the reference price used to form the Setup. The default is Close, which means the reference price is the close n bars ago, where n is the Period value (default 4). Selecting the word in this field displays the Price menu, which enables you select an alternative price for the reference bar. Set to On, comparisons are made using the greater-than-orequal-to and less-than-or-equal-to operators. Set to Off, comparisons are made using the greater-than and less-than operators. The default is On. Selecting the word in this field displays the Status menu, which enables you to change this setting. Indicates the color in which Setup labels are displayed. Default is Green. Selecting the word in this field displays the Color menu, which enables you to choose an alternative color.

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Sequential

Setup Parameters

Cancel Cond Parameter


This parameter enables the user to invoke the conditions that cancel the Setup once Countdown begins. Selecting the word in this field displays the Cancel Cond menu, which enables you to invoke the cancellation condition you want.

The Cancel Cond Menu contains the following selections:

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Sequential

Intersection Parameters

Selection Off Selection H>C Selection C>C Selection H>H Selection C>H Selection

Function No condition. A subsequent high which exceeds the highest close of the Setup period. For short setup, reverse the condition. A subsequent close which exceeds the highest close of the Setup period. For short setup, reverse the condition. A subsequent high which exceeds the highest high of the Setup period. For short setup, reverse the condition. A subsequent close which exceeds the highest high of the Setup period. For short setup, reverse the condition.

Intersection Parameters

Once the Setup has been completed and Intersection has occurred, the Countdown phase begins. The Buy Countdown requires a series of 13 bar closes less than or equal to the low 2 bars earlierNote: the 13 count need not be consecutive. The Buy Countdown appears below the respective bars in red numbers from 1 to 13. The Sell Countdown requires a series of 13 bar closes greater than or equal to the high 2 bars earlierNote the 13 count need not be consecutive. The Sell
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Intersection Parameters

Countdown appears on the chart above the respective bars in red numbers from 1 to 13.

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Sequential

Countdown Parameters

Parameter Length Parameter Period Parameter

Continue Parameter

Function Indicates the bar that commences the search for Intersection. The default is 8, or the eighth bar back. Indicates whether the search for Intersection occurs during or after Setup. The default is 3, and since the default for Setup is 4, default conditions mean that Intersection occurs during Setup. Determines whether to continue the search for Intersection when Setup is canceled by a user qualification. The default is On. Selecting the word in this field displays the Status menu, which enables you to change this setting.

Countdown Parameters

Once the Setup has been completed and Intersection has occurred, the Countdown phase begins. The Countdown to identify a low risk zone requires a series of 13 bar closes less than (or equal) to the low 2 bars earlier. Note: the 13 count need not be consecutive. The Countdown to identify a low risk zone appears below the respective bars in red numbers from 1 to 13.

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Sequential

Countdown Parameters

The Countdown to identify a high risk zone requires a series of 13 bar closes greater than (or equal to) the high 2 bars earlier. Note the 13 count need not be consecutive. The Countdown to identify a high risk zone appears on the chart above the respective bars in red numbers from 1 to 13. During the Countdown, should the market complete another Setup, the Countdown process may have to begin again. This is called Recycle.

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Sequential

Countdown Parameters

Parameter Status Parameter Length Parameter Period Parameter Price Parameter

Equality Parameter

Continue Parameter

Color Parameter

Function Determines whether countdown is on or off. Default is On. Selecting the value in this field displays the Status menu, which enables you to change this setting. Indicates the total number of bars in the Countdown period. Default is 13. Indicates the number of days that the Countdown looks back. Default is 2. Indicates the specific reference price used to compare with the low or high 2 bars earlier. Default is Close. Selecting the word in this field displays the Price menu, which enables you to change the reference price. Set to On, comparisons are made using the greater-than-orequal-to and less-than-or-equal-to operators (closes equal to the reference bars low or high are excluded). Set to Off, comparisons are made using the greater-than and less-than operators (closes equal to the reference bars low or high are included). The default is On. Selecting the word in this field displays the Status menu, which enables you to change this setting. Determines whether to continue the countdown when Setup is canceled by a user qualification. The default is Off. Selecting the word in this field displays the Status menu, which enables you to change this setting. Indicates the color in which Countdown labels are displayed. Default is Green. Selecting the word in this field displays the Color menu, which enables you to choose an alternative color.

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Sequential

Recycle Parameters

Recycle Parameters

Recycle has but one parameter, Status. By default, Recycle is set to B/On/After, or Before, On, or After. Selecting the word in this field displays the Recycle, which enables you to choose a particular behavior for the Recycle. The Recycle menu contains the following selections:

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Sequential

Qualifying Sequential

Selection No Selection Before Selection Before/On Selection B/On/After Selection

Function No recycle. Indicates that Recycle will only occur before the Countdown is complete. Indicates that Countdown will restart only if Recycle occurs before or on Countdown completion. Indicates that Countdown will restart before or on or after Countdown is complete.

Qualifying Sequential
The Qualifiers allow the user to perfect the relationships between Setup and/or the Countdown bars. For example, to set the 13th Countdown bar less than or equal to the 10th Countdown bar, Qualifier #1 should read as follows: Qual 13 Qval close Qtype CD Equal yes With 10 Wval close Wtyp CD

Another example is as follows: the 10th Countdown bar is less than or equal to the 8th bar of the Setup. Qual 10 Qval close Qtype CD Equal yes With 8 Wval close Wtyp SU

You may select up to 15 various relationships and parameters. This study identifies bar pattern sequences for the Sequential indicator. The display is a series of numbers drawn above or below the high or low of each bar that is part of the pattern. (No values are presented in the Aspen cursor window by this study.) Two patterns are recognized: a low risk setup and a high risk setup. Countdowns that identify low risk zones appear below the bars, and Countdowns that identify high risk zones appear above the bars. Each pattern consists of two parts, Setup and Countdown. In each part, bars are numbered from 1, but different colors may be used to distinguish the two parts. A low risk Setup consists of X consecutive bars with:
Price < price[ K bars before]

A high risk Setup consists of Y consecutive bars with:

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Sequential

Qualifying Sequential

Price > Price[K bars ago] X and Y are parameters, typically 9 and 4 respectively. The default is the close of each bar, but other prices can be selected. Typically, Aspen price selections such as Open, High, Low, Close, Mid-Point ((H+L)/2), Avg ((H+L+C)/3), Average tick (the latter is only available on tick bars) can be substituted. Setup must begin after a bar for which the price condition does NOT hold. Once a Setup pattern is recognized, it must be qualified by an Intersection before the Countdown phase can begin. For a low risk Setup, Intersection occurs once a bar appears whose high is greater than or equal to the low of any bar three or more bars earlier (but not earlier than the beginning of the Setup pattern). Conversely, for a high risk Setup, Intersection occurs once a bar whose low is less than or equal to the high of any bar three or more bars earlier (but not earlier than the beginning of the Setup pattern). The three-bar minimum distance is fixed, not parameterized, and highs and lows are tested as specified regardless of the price selector. The search for Intersection bar begins with the Mth bar of the Setup (parameter M is 8 by default, but can be as little as 4 or as large as the Setup length). Search for Intersection normally continues beyond the end of the Setup pattern, but can optionally be stopped at the end of the Setup. When and if Setup and Intersection occur, the Countdown phase begins with the last bar of the Setup (or with the Intersection bar, whichever is later). Countdown searches for and numbers bars satisfying this condition. For a low risk Countdown: price < low[ j bars before] For a high risk Countdown: price > high[ j bars before] After a Setup is complete, the Setup/ Countdown sequence is canceled by any of the following conditions: 1. Completion of the opposing Setup pattern (whether qualified by an Intersection or not) 2. For a low risk Setup, any of the following conditions:

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Sequential

Qualifying Sequential

a. High price subsequent to Setup > highest close of any Setup bar. b. Close price subsequent to Setup> highest close of any Setup bar. c. High price subsequent to Setup > highest high of any Setup bar. d. Close price subsequent to Setup > highest high of any Setup bar (default) For a high risk Setup, these conditions are written as: a. Low price subsequent to Setup < lowest close of any Setup bar. b. Close price subsequent to Setup < lowest close of any Setup bar c. Low price subsequent to Setup < lowest low of any Setup bar. d. Close price subsequent to Setup < lowest low of any Setup bar. (default) Testing of conditions 2a-2d can be enabled and disabled by four parameter flags, but condition 1 is always tested. After a cancellation occurs a new Setup must be formed to restart the pattern. Although an opposing Setup always cancels the Intersection search and Countdown phase, a new Setup in the same direction need not. A new Setup completing while a Countdown of the same direction is active either recycles the Countdown (causing bar numbering to begin anew) or is ignored completely. In the latter case, only an opposing Setup can reset the pattern. A study parameter selects whether a new Setup will recycle an active Countdown of the same direction. The Countdown is recycled if the new Setup completes: 1. strictly before the Countdown completes (reaches its specified length) 2. on or before the Countdown completion 3. at any time on, before, or after Countdown completion (default) 4. only after Countdown completion. Otherwise the new Setup is ignored (and not drawn on the chart). Note that if a Setup does recycle a Countdown, some of the Setup bars may also be pre-recycled Countdown bars, and so may require two labels.

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Sequential

Qualifying Sequential

A list of additional qualification conditions can be applied. Each qualifier is an additional condition needed to recognize a Setup or Countdown bar. (Note that failure of a Setup-bar qualifier invalidates the whole Setup, whereas failure of a Countdown-bar qualifier merely postpones the Countdown.) Each qualifier list entry is of the form:
Price of the J' th bar of Setup / count < Price ofK' th bar of setup / count where each of the underlined items is independent. This condition restricts recognition of the left-hand bar; the bar named on the right-hand side must be earlier in the sequence.

Note that only a complete Setup is labeled on the chart, so there will always be exactly 9 (or more generally N) consecutive Setup labels. Countdown bars, however, are numbered as encountered regardless of whether the Countdown is later completed. The command keyword for Sequential is .TDSEQUENTIAL.

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TD Gap

Qualifying Sequential

TD Gap
TD Gap illustrates both Gaps and Laps. Gaps occur when either a bars high fails to intersect the previous bars low or a bars low fails to intersect a previous bars high. Laps occur when a high or low does intersect the previous bars high or low, but not the close. Gaps and Laps are represented by a g for gap and an l for laps. If the Gap or Lap occurs on a designated day, a + is displayed beside the alpha character. For an up gap or lap, capital letters, G and L respectively, appear once the close of bar 8, 9, 10, or 11, after the gap bar, is greater than all closes of all bars since the Gap or Lap bar.

The reverse logic is used for a down Gap or Lap. For further information on TD Gap, please refer to Thomas R. DeMark, The New Science of Technical Analysis, New York: John Wiley & Sons, 1994, Chapter 8, Gaps.

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TD Gap

TD Gap Parameters

TD Gap Parameters

This study marks gap and lap bars. The display is simply small labels drawn above or below some bars. (No values are presented in Aspen cursor window by this study.) (NB: gap bar for this discussion is different from the usual Aspen meaning of gap bar.) An up gap bar has a low price strictly greater than the prior bars high; a down gap bar has a high price strictly less than the prior bars low. An up lap bar has a low price strictly greater than the prior bars close, but not greater than the prior high (so that it is not a gap bar). Similarly, a down lap bar has a high price strictly less than the prior bars close, but not less than the prior low. Thus every bar is in at most one of these four categories. Up gaps are marked with a g or G appearing below the gap bars low; down gaps are market with g or G appearing above the gap bars high. For additional emphasis, different colors are used for up and down labels. Lap bars are market in the same way, but using l or L. A + is added to the label if the bar is a daily bar occurring on a specified day of the week (no + signs appear if the timebase is not daily). For example, our research suggests that Monday gaps or laps are pre-meditated and less emotional. Consequently, their appearance conveys more significance than other days of the week. A gap or lap label is upper case (G or L) if at least one bar occurring from M to N bars (inclusive) after the gap/lap bar has a Price strictly greater than (for up gaps) or less than (for down gaps) the price of all prior bars back to and including the gap/lap bar. The parameters M and N, as well as the tested price, are user-selectable. Lower case is shown if there are enough subsequent bars available to make this determination. Gap bars (in the Aspen sense) are ignored by this study: a bar is always compared to the prior non-gap bar to determine if it is a gap/lap bar, and Aspen gap bars are ignored in counting forward to determine upper or lower case labeling. The study command for TD Gap is .TDGAP.
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TD Gap

TD Gap Parameters

Field Description Field Start Field End Field Day Field

Function Lists the elements in the Gap and Lap Bars study: Down Gaps Up Gaps Specifies gap count. If a price is above the specified bars price for a buy (less than for a sell), capital G or L replace lower case g or l. Specifies lap count. If a price is above the specified bars closes for a buy (less than for a sell), capital G or L replace lower case g or l. Specifies the day on which a + will be displayed if a gap/lap occurs. Default is Monday. Selecting the word in this field displays the + Day menu, which enables you to choose an alternative week day. The + Day menu contains the following selections:

Price Field

Color Field

Choosing a selection sets the respective day in the + Day field. Specifies the price used to determine upper case conditions. The default is Close. Selecting the word in this field displays the Price menu, which enables you to choose an alternative price. Indicates the colors in which gap and lap bar labels are rendered. Default for down gaps is green; default for up gaps is red. Selecting a word in this field displays the Color menu, which enables you to choose an alternative color for the respective element.

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TD Gap

TD Gap Parameters

Price Menu

The Price menu contains the following selections:

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Daily Range Projections

Daily Range Projections Parameters

Daily Range Projections


The Daily Range Projections study forecasts the projected range for the ensuing bar. The user has a choice of displaying all range projections historically or only the current and next bars.

For further information on Range Projection, please refer to Thomas R. DeMark, The New Science of Technical Analysis, New York: John Wiley & Sons, 1994, Chapter 9, Daily Range Projections.

Daily Range Projections Parameters

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Daily Range Projections

Daily Range Projections Parameters

This study draws projected high and low values for the next bar of a series. A short horizontal line is drawn at the projected high and low for a bar position. Since Aspen normally aligns charts with the current bar at the far right, the default chart position will need to shift left a bar or so when this study is active. The only visible user option is whether to compute and draw projected value for all bars visible in the chart window, or only for the current and next bars. The projections for a bar are based on only the immediately preceding non-gap bar. The procedure is as follows: If close < open: X = ( High + Low + Close + Low) If close > open: X = ( High + Low + Close + Low) If close = open: X = ( High + Low + Close + Low) Then compute: Projected high = X-Low Projected low = X-High The study command for Daily Range Projections is .TDRP. Study parameters include: Field Description Field Function Lists the elements of the Range Projection study: Top Bottom Indicates whether projections are drawn before the current bar. The default is Off, which means that projections are not drawn before the current bar. Selecting the word in this field displays the Status menu, which enables you to change this
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All Bars Field

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Daily Range Projections

Daily Range Projections Parameters

Color Field

setting. Indicates the color in which the respective study element is rendered. The default for the Top of the Range Projection is Green; the default for the bottom is Red. Selecting a word in this field displays the Color menu, which enables you to choose alternative colors for the respective element.

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Rate of Change Studies Rate of Change

Rate of Change Studies


Rate of Change studies incorporate market timing and market sentiment. For further information on Rate of Change, please refer to Thomas S. DeMark, The New Science of Technical Analysis, New York: John Wiley & Sons, 1994, Chapter 10, Rate of Change. Studies: Rate of Change TD Pressure TD Pressure Ratio TD Pressure Change

Rate of Change
The Rate of Change study identifies overbought/oversold conditions by simply comparing current price activity to some period earlier.

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Rate of Change Studies Rate of Change

The study command for ROC is .TDROC.

Rate of Change Parameters

This study draws a graph of rate-of-change values, which fluctuate around 1.0. Optionally, dotted reference lines can be drawn at user-set values, but these lines do not affect the calculation or display of the ROC line itself. The basic ROC calculation at any given bar is:

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Rate of Change Studies Rate of Change

price

price[ K bars ago]

where the price examined is selectable (default is close), as is the distance K. The final study value is an N-bar moving average of this value. ROC outputs a gap at any gap bar, but gap bars are ignored in counting back from non-gap bar. Field Description Field Function Lists the study elements in the Rate of Change Indicator: TD ROC Ref A Ref B Determines whether the reference lines (Ref A and Ref B) are drawn. Default is On, or drawn. Selecting the word in this field displays the Status menu, which enables you to change this setting. Identifies the moving average calculation used by the study. The default is Simple. Selecting the word in this field displays the Avg. Type menu, which enables you to choose an alternative moving average calculation. Specifies the number of periods used to calculate the moving average. Default is 1, or one bar. Selecting the number in this field enables you to change this setting. Identifies the comparison distance (in bars). The default is 12. Selecting the number in this field enables you to change this setting. Identifies the band parameter for overbought/oversold conditions as shown by the reference lines (Ref A and Ref B). The default for Ref A is 102.5. The default for Ref B is 97.5. Selecting the number in this field enables you to change this setting. Specifies the price level used for comparison. Default is Close. Selecting the word in this field displays the Price menu, which enables you to change this setting. Specifies the color of the different study elements. Default for the TD ROC line is Green; default for the reference lines (Ref A and Ref B) is Gray. Selecting any word in this field displays the Color menu, which enables you to change the color of the respective study element. Specifies the rendering methods of the different study
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Status Field

Avg. Type Field

Period Field Compare Field Ref Field

Price Field Color Field

Graph Field
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Rate of Change Studies TD Pressure Index

elements. Default for the TD ROC line is Line; default for the reference lines (Ref A and Ref B) is Dotted. Selecting any word in this field displays the Graph menu, which enables you to change the rendering method of the respective study element.

TD Pressure Index
TD Pressure measures the degree of accumulation (buying) and of distribution (selling). TD Pressure is represented by a line or histogram displaying the cumulative index of buying and selling, The formula combines price activity and volume and their relationship with the previous bars open, high, low, and close.

The study command for Pressure is .TDPRS. For further information on TD Pressure, please refer to Thomas R. DeMark, The New Science of Technical Analysis, New York: John Wiley & Sons, 1994, Chapter 5, Accumulation Distribution.

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TD Pressure Parameters

This study draws a graph of accumulation/distribution pressure. Optionally, dotted reference lines can be drawn at user-set values, but these lines do not affect the calculation or display of the TDPRS line itself. At each bar, TDPRS computes a price ratio and then optionally multiplies this by the volume. Several different price ratios are available:

( Close Open)

( High Low )

( Default )

( Close Prior_ Close)


Close - Open Close - Prior_Close

( high Low )

Different calculation is applied of the opening price is more than a threshold percentage away from the prior close. If Open is more than P% greater than the prior close, then instead compute:

( ( Close Prior_ Close) + ( Close Low) )

( High Prior_ Close)

In either case, the result is optionally multiplied by volume. TDPRS outputs a gap at any gap bar, but gap bars are ignored in looking back to find the prior close value. Field Price Parameter
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Function This selection allows the user to select one of four


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Rate of Change Studies TD Pressure Index

methods to measure accumulation/distribution. The default is the quotient of current bar close minus the previous bar close divided by the high of the current bar less the current bar low. Other options are available in the Price Ratio menu.

The (C-O)/(H-L) selection activates the quotient of current bar close minus the previous bar close divided by the high of the current bar less the current bar low. The C-PC selection activates the difference of the close of the current bar less the close of the previous bar. The C-O selection activates the difference of the close of the current bar less the open of the current bar. The (C-PC)/(H-L) selection activates the quotient of the current bar less the close of the previous bar divided by the high of the current bar less the low of the current bar. Vol Rule Parameter Identifies the Volume Rule employed in the calculation of the study. The default is the quotient of current bar close minus the previous bar close divided by the high of the current bar less the current bar low. Selecting the word in this field displays the Volume Rule menu, which enables you to change the volume rule:

Threshold Parameter Color Parameter


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Specifies the adjustment to the calculation; compensates for significant opening price gaps using the specified percentage. Default is 8.0. Indicates the color used to render the study. The default is
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Rate of Change Studies TD Pressure Ratio

Graph Parameter

Green. Selecting the word in this field displays the Color menu. Indicates the rendering method for the study. The default is Line. Selecting the word in this field displays the Graph menu.

TD Pressure Ratio
The formulas are the same as the Pressure Index formulas; however, the period of calculation is not cumulative, but rather for a specified period. The rate of change of the current value versus X days ago is plotted on the chart.

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TD Pressure Ratio Parameters

Field Description Field

Status Field

Avg. Type Field

Period Field Price Field

Vol Rule Field

Threshold Field Ref Field

Function Lists the elements in the TD Pressure Ratio study: Pressure Ref A Ref B Determines whether the reference lines (Ref A and Ref B) are displayed. The default is on. Selecting the word in this field displays the Status menu, which enables you to change this setting. Identifies the moving average calculation used by the TD Pressure Ratio study. The default is Simple. Selecting the word in this field displays the Avg. Type menu, which enables you to change the moving average calculation. Specifies the bar used for comparison. The default is 55, or the 55th bar back. Selecting the number in this field enables you to change the comparison bar. This selection allows the user to select one of four methods to measure accumulation/distribution. The default is the quotient of current bar close minus the previous bar close divided by the high of the current bar less the current bar low. Other options are available in the Price Ratio menu. Identifies the Volume Rule employed in the calculation of the study. The default is the quotient of current bar close minus the previous bar close divided by the high of the current bar less the current bar low. Selecting the word in this field displays the Volume Rule menu, which enables you to change the volume rule. Specifies the adjustment to the calculation; compensates for significant opening price gaps using the specified percentage. Default is 8.0. Defines the overbought/oversold levels that are indicated by the reference lines (Ref A and Ref B). By default, the overbought level is 72%, and the oversold level is 28%.
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Graph Field

Color Field

Selecting either of the percentages in this field enables you to change the overbought and oversold band parameters. Identifies the rendering method used for each study element. The default for the Pressure line is Line; the default for both reference lines (Ref A and Ref B) is Dotted. Selecting any of the words in this field displays the Graph menu, which enables you to change the rendering method used for the respective study element. Indicates the color used to render the respective study element. The default for the Pressure line is Green; the default for the reference lines (Ref A and Ref B) is Gray. Selecting the word in this field displays the Color menu, which enables you to change the color of the respective study element.

TD Pressure Change
This study computes rate of change of pressure.

The options and calculations are exactly like TDPRS, except that the final result is:
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TDPRS

TDPRS [ K bars ago]

The study command for Pressure Change is .TDPRC.

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Rate of Change Studies TD Pressure Ratio

TD Pressure Change Parameters

Field Avg. Type Field

Period Field Compare Field Price Field

Vol Rule Field

Threshold Field Color Field Graph Field

Function Identifies the moving average calculation used by the TD Pressure Change study. The default is Simple. Selecting the word in this field displays the Avg. Type menu, which enables you to change the moving average calculation. Specifies the bar used for comparison. The default is 55, or the 55th bar back. Selecting the number in this field enables you to change the comparison bar. Specifies the bar used for comparison. Default is 8, or the 8th bar back. Selecting the number in this field enables you to change the comparison bar. This selection allows the user to select one of four methods to measure accumulation/distribution. The default is the quotient of current bar close minus the previous bar close divided by the high of the current bar less the current bar low. Other options are available in the Price Ratio menu. Identifies the Volume Rule employed in the calculation of the study. The default is the quotient of current bar close minus the previous bar close divided by the high of the current bar less the current bar low. Selecting the word in this field displays the Volume Rule menu, which enables you to change the volume rule. Specifies the adjustment to the calculation; compensates for significant opening price gaps using the specified percentage. Default is 8.0. Indicates the color used to render the study. The default is Green. Selecting the word in this field displays the Color menu. Identifies the rendering method used for the study line. The default is Line. Selecting the word in this field displays the Graph menu, which enables you to change the rendering method used for the study.

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Waldo Patterns

TD Pressure Ratio

Waldo Patterns
For further information on Waldo Patterns, please refer to Thomas S. DeMark, The New Science of Technical Analysis, New York: John Wiley & Sons, 1994, Chapter 13, Waldo Patterns. In Aspen, Waldo patterns are color rules that are available by subscription.

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Index

Index
.
.TDARC 18 .TDCH1 52 .TDCH2 55 .TDDMI 37 .TDFACTOR 16 .TDGAP 77 .TDLINE 5 .TDMA1 47 .TDMA2 50 .TDPRC 92 .TDPRS 86 .TDREBO 31 .TDREI 21, 27 .TDROC 84 .TDRP 81 .TDSEQUENTIAL 60 .TDWAVE 40

E
entry high risk 60 low risk 60

F
Fibonnaci retracements 20, 39

G
gap bar 38, 76, 85, 87

I
Intersection i

A
accumulation distribution 86 anchor points 10, 18, 19, 21, 23, 25

L
lap bar 76, 77

M
menus v, 1, 2, 3, 11, 18, 21, 25, 28, 29, 30, 33, 42, 43, 49, 51, 53, 54, 56, 57, 58, 59, 61, 62, 64, 65, 68, 70, 71, 78, 79, 81, 82, 85, 87, 88, 89, 90, 91, 93 + Day 78 Avg. Type 29 Cancel Cond 65 Color 30 DeMark Trendlines 3, 17, 19, 23 DeMark Trendllines 2 DeMarker Indicator parameters 38 D-Wave parameters 41 Gap and Lap Bars parameters 77 Graph 30 Price 33, 43, 49, 61, 79 Price Ratio 87 Range 33
112

C
contratrend 60 conventions used in this guide iv copyrights i Countdown i

D
Daily Range Projections i, 80, 81 demand 4, 7, 8, 11, 36 DeMarker Indicator i, 36, 38 distribution, 86 D-Wave 39, 41

DeMark Studies Users Guide

Index

Range Expansion Breakout 32 Range Expansion Index parameters 28 Range Projection parameters 81 Rate of Change Indicator parameters 84 Recycle 71 Rel 62 Section 61 Select 11 Select DeMark Study 1 Add a Study toggle 1 Status 11, 28 TD Channel 1 53 TD Channel 2 56 TD Channel 3 58 TD Line parameters 11 TD MA1 parameters 48 TD MA2 parameters 50 TD Pressure Change parameters 93 TD Pressure Index parameters 87 TD Pressure Ratio parameters 90 TD Sequential parameters 63, 65, 66, 68, 71 Trend Line Function 2 Trend Line Functions 2 Up/Down 42 Volume Rule 88 moving averages 46

Recycle 71 retracements 2, 3, 18

S
Sequential i, 60, 61, 64, 72 Setup i, 60, 62, 63, 64, 65, 66, 68, 70, 72 supply 4, 8, 11, 36

T
TD Absolute Retracement 24, 26 TD Breakout Qualifiers i TD Demand Line i, 4 TD Dollar Rated Option Ratio i TD Gap 76, 77 TD Line Breakout i, 8 TD Line Value i TD Lines i, 4, 5, 6, 7, 8, 9, 10, 11, 12, 14 qualifying 5 TD Points 5, 7, 8, 11 TD Pressure 86, 87 TD Pressure Change 91, 93 TD Pressure Ratio 89, 90 TD Price Points i TD Price Projector i, 48 TD Relative Retracement 20, 22, 23, 24 TD Retracement Arc i, 18, 19 TD Supply Line 4 TDCH I 51, 53 TDCH II 54, 56, 58 TDCH III 57 TDCH3 57 TDMA I 46, 48 TDMA II 50 The New Science of Technical Analysis, Library of Congress Publication Data ii toggles 1 Tom Demark Factor study 15 Tom Demark Line study 4, 5, 6 demand line 4 supply line 4 Tom DeMark Points 5 Tom Demark Trend Factors study 15 trademarks held by Thomas R. DeMark i Trend Factors i, 2, 3, 4, 15, 17, 18 trend lines 1, 2, 4, 7, 17, 18, 19, 21, 23, 24, 25, 26
113

N
non-gap bar 31

P
parameters 8, 11, 28, 29, 38, 61, 64, 65, 68, 70, 71, 85, 87, 88, 89 Points, TD 5 Preface iv

Q
qualifying TD Lines 5

R
Range Expansion Breakout 30, 32 Range Expansion Index (REI) i, 27, 28, 29 Rate of Change 83, 84
DeMark Studies Users Guide

Index

W
Waldo Patterns 94

Z
zones entry 60

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