DeMarker Indicator

◙ Primary Use: Analyzing Market Trends / Determining the Time to Trade

◙ Trading: Evaluating Trends and Spotting Potential Price Exhaustion

◙ Standard Settings: 14 Periods

Introduction to the DeMarker Indicator

The DeMarker Indicator was developed by Tom DeMark, founder and CEO of DeMark Analytics. The DeMarker Indicator is designed to evaluate areas where a price trend is likely to form or become exhausted—before these movements occur.

• The DeMarker focuses not only on market direction but also on achieving optimal timing.

Chart: DeMarker Indicator on EUR/CAD

 Calculating DeMarker Indicator

The DeMarker indicator is the sum of all price increment values recorded during the "i" period divided by the price minima:

■ The DeMax (i) is calculated:

If high (i) > high (i-1), then DeMax (i) = high (i) – high (i-1),

otherwise DeMax (i) = 0

■ The DeMin (i) is calculated:

If low (i) < low (i-1), then DeMin (i) = low (i-1) – low (i),

otherwise DeMin (i) = 0

■ DeMarker value is calculated as:

DMark (i) = SMA ( DeMax, T ) / ( SMA ( DeMax, T ) + SMA ( DeMin, T ) )

Where:

T= the number of periods

SMA = Simple Moving Average

Trading with the DeMarker Indicator

You can use DeMarker in the following ways:

• Trend-Following Strategy:

  • Buy when DeM crosses above 0.3 in an uptrend.

  • Sell when DeM drops below 0.7 in a downtrend.

• Reversal Strategy:

  • Look for overbought/oversold levels with price action confirmation (e.g., candlestick patterns).

  • Combine with trend filters (e.g., 200 EMA or ADX > 25) to avoid false signals in ranging markets.

DeMarker vs. RSI & Stochastic

Here is a comparison of DeMarker vs. RSI & Stochastic:

Advantage of DeM: Less lag than RSI, better at catching early reversals in strong trends.

Example DeMarker Trade Setup

1. Uptrend Scenario:

   • Price is rising, DeM stays above 0.5.

   • DeM reaches 0.75 → Watch for bearish reversal candlesticks (e.g., shooting star).

2. Downtrend Scenario:

   • Price is falling, DeM stays below 0.5.

   • DeM drops to 0.25 → Look for bullish reversal patterns (e.g., hammer).

DeMarker -Final Thoughts

• Strengths: Works well in trending markets, helps avoid chasing overextended moves.

• Limitations: Can give false signals in choppy markets (use with ADX or moving averages).

Platform Setup

You can install the 'DeMarker' indicator directly in MetaTrader-4 or MetaTrader-5:

□ GO TO → INDICATORS → OSCILLATORS → DEMARKER OSCILLATOR

□ SETTINGS → 14 PERIODS

■ DeMarker Indicator

ExpertSignal.com ©