Indicators

Tom DeMark Trendlines

The TD-Line method was developed by Tom DeMark, basically it requires a trendline to connect TD Points (more commonly called “pivot”).

TD Point High is a high preceded and followed by an equal number of lower highs. TD Point Low is the opposite, a low surrounded by an equal number of higher lows. Tom Demark trendlines are constructed by connecting TD Points highs or lows of the same degree.

Tom DeMark Trendlines

There are four different parameters to qualify a trendline breakout. If any of the four qualifiers is true, then the breakout is valid:

TD Trendlines – Upside Breakout

  • Qualifier 1: The price bar prior to an upside breakout must be a down close.
  • Qualifier 2: The current price bar’s open must be greater than both the current TD Supply Line and the previous price bar’s close and must then trade at least one tick higher
  • Qualifier 3: The previous price bar’s close plus the previous bar’s buying pressure must be below the current price bar’s TD Supply Line price level.
  • Qualifier 4: The current price bar’s open must be above both the previous two price bars’ closes, and the current price bar’s TD Supply Line must be above the previous price bar’s high.

TD Trendlines – Downside Breakout

  • Qualifier 1: The price bar prior to a downside breakout must be an up close.
  • Qualifier 2: The current price bar’s open must be less than both the current TD Demand Line and the previousprice bar’s close and must then trade at least one tick lower.
  • Qualifier 3: The previous price close minus the previous bar’s selling pressure must be above the current price bar’s TD Demand Line price level.
  • Qualifier 4: The current price bar’s open must be below both the previous two price bars’ closes, and the current price bar’s TD Demand Line must be below the previous price bar’s low.

Download TD Trendlines Indicator

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