Tom DeMark Trend Line on Daily

[erebus]

Anybody ever use or study how Tom DeMark Trend Line on any charts?

He has a whole range of indicators which pin point many price patterns, many of which he has even copyrighted; I'm only interested in the way the trend lines are drawn.

Apparently he uses only 2 points, determined by what appears to me to be a Fractal, one that has 2 bars higher or lower each side.

There is an indicator that draws these of course and also projects a target. I've been looking at a few and I think there must be potential to make a profit using these.

It won't be a day trade, and there would be opportunity to cut losses but also get back in or add on if the candles are telling the right story.

First a picture of a Fractal as I understand it.

 

[erebus]

Here is chart of EURCHF near the end of 15-October-2015

You can spot the 2 points for both upper & lower trend line drawing points; if not, please ask.

Also, you can see price has broken the lower, yellow trend line and below it there is the price projection, horizontal line in yellow.

The dilemma will be, when to trade? Do you take intra-day or next when there is confirmed close outside of lines?

I guess, in this example, the break of previous day could have been used, with the stop above it at 50 pips; the target is about 150 pips, so good risk to reward potential.

Any interest, please discuss your ideas or experience, thanks, John

 

[erebus]

One thing I am concerned about is what most would call "repainting" or what happens when the indicator adjusts when price action forms a new point that is eligible for the trend line?

I forgot to mention, the trend line draws from right to left, not like the way you usually draw them.

Also, for the bottom line, the second point must be lower to give the line a slope up - and the reverse for the top line, it has to slope down.

On this chart of NZDUSD, look like the top line would have been in place for days, is nearly to the target without re-drawing the line.

However, I see that a 2nd day is forming to the right of the low, swing point, so after Friday close or on Monday open, we should see a new line as I have drawn in purple.

So this could be a good thing, it has followed price action and is ready for next down swing...

Any thoughts, anybody?

 

[erebus]

And it worked this week on GOLD, previous Friday closed above the line, 3 days closed up, Thursday hit the average weekly range, and this Friday not yet happened, target is still up there!

Most probably had a trend line there anyway...

 

[erebus]

Another example, probably lots of whipsaw, stop outs & losses on the uptrend but possibly pays off with patience for a move like this

Patience and the ability to recognize it is happening!

 

[erebus]

Here is the GBPJPY breaking out in Asian session on a Friday; if it closes outside, might be chance to long this next week. In the meantime, this gives me an idea to put a buy only grid trading EA on demo into action

 

[erebus]

I really need to be able to concentrate and read the chart as it happens like in this example; too easy to see after the facts...

 

[TheForexGuy]

So to keep it simple, this is just drawing trend lines, and then using breakouts to get into a trade.

But this guy Tom, is using and indicator to draw the trend lines for him? Is that really necessary - Or is he getting a program to do it so he can work an ea into it or something.

 

[erebus]

Pretty much, use as much candle + pattern recognition as I can, that's the plan..

Tom Demark is like you - he has written a few indicators, sure you never heard of him?

https://en.wikipedia.org/wiki/Thomas_DeMark

 

[erebus]

Here is an example GBPUSD early June 2015 to show how I think the "points" for the trend lines are shown, remember we need 2 candles on either side for it to form, and the subsequent price action for a trade on chart also

 

[erebus]

Signals for week beginning October 19, short seems fair enough on AUDUSD, 200 pips target, see how it goes because at 10:30 we have RBA Monetary Policy Meeting Minutes

 

[erebus]

And also AUD related, should have been long at last Friday high already... wonder if this is showing the way for the news ahead?

 

[erebus]

Here is another close on breakout of trend line; did someone leak the BoC Rate Statement due at Wednesday midnight AEST ???

 

[erebus]

No replies = No interest. I haven't quite given up on this yet, trying to incorporate into TFG overall methodology. I'm looking at this more from the Fractal Break instead of the pure trend line break; here is the previous chat of GBPCAD, you can see where price has broken both the fractal and the trend line - plenty of time to think about entry also. It is also at the next breakout point and FMOC is only hours away, so be careful.

 

[erebus]

Catch up with another previous chart posted, it has been down 200, now up 200 so not for the faint hearted, other entry are available eg. Inside Days

 

[erebus]

Last catch up, too obvious this one.....

 

[erebus]

Here is another success test case, 150 pips on GBPAUD. Sorry the chart is a bit crowded, there was Fractal Break on both 4H and Daily, trend line break on 4H plus Inside Bars break out. But for some reason I actually entered on BRN of 2.15. Profit target was ADR range high = spot on, for now. The DeMark trendline indicator has profit line up another 780 pips !!!

 

[KiwiOz]

Hey erubus. My take on this is on FF
You probably have seen this thread before so maybe you are looking for another answer to Tom demarks method

 

[erebus]

Hey erubus. My take on this is on FF
You probably have seen this thread before so maybe you are looking for another answer to Tom demarks method

I have gone off these; I only trade with The Forex Guy BattleStation candle patterns on 4 hour charts now.

Time to buckle down and stick with something and that's what works for me!

 

[erebus]

Let's see if the EURUSD can deliver a winner on this break out, just before USA opens