Personal Notes on Demark Patterns

by Emmanuel Nyemera, PhD

Buy Patterns
TD Buy Setup

Sell Patterns
TD Sell Setup

Duration

A series of 9 or more consecutive price bars with

each one having a close less than the close 4 price
bars earlier. Nine bars is the minimum for a Setup.

Duration

A series of 9 or more consecutive price bars with each one

having a close greater than the close 4 price bars earlier.
Nine bars is the minimum for a Setup.

TDST Support

The lowest true low of the last completed TD Sell

Setup. For any trading bar, its true low is defined

TDST
Resistance

The highest true high of the last completed TD Buy Setup.

For any trading bar, its true high is defined as the

as the lower of either that bar's low or its

previous bar's close.

Perfection

Prerequisites
before
Trading
Entry
Techniques :

The low of bars 8 or 9 of the TD Buy Setup or the

low of a subsequent trading bar must be less than
or equal to the lows of bars 6 and 7 of the TD Buy
Setup
- None of the bars within the TD Buy Setup
has closed below TDST Support
- Oscillators are in oversold zones.

higher of either that bar's high or its previous bar's

close.

Perfection

The high of bars 8 or 9 of the TD Sell Setup or the high of a

subsequent trading bar must be greater than or equal to
the highs of bars 6 and 7 of the TD Sell Setup
-

None of the bars within the TD Sell Setup has

closed above TDST Resistance
Oscillators are in overbought zones.

Trading
1. If the close of the TD Buy Setup bar 9 is in
close proximity (around 23.6%) to TDST
Support and the close of TD Buy Setup bar
9 is lower than the close of TD Buy Setup
bar 8, buy on the close of TD Buy Setup 9.
2. In other situations :
a. Buy on the reversal bar, the signal bar,
the snap-back bar or the reversal
confirmation bar.
b. Trail a buy-stop to go long 5 pips + the
pip spread above the 1BH following

Entry
Techniques

1. If the close of the TD Sell Setup bar 9 is in close

proximity (around 23.6%) to TDST Resistance and
the close of TD Sell Setup bar 9 is higher than the
close of TD Sell Setup bar 8, sell on the close of TD
Sell Setup 9.
2. In other situations :
a. Sell on the reversal bar, the signal bar, the
snap-back bar or the reversal confirmation bar.
b. Trail a sell-stop to go short 5 pips + the pip
spread below the 1BL following the
Stochastics bearish reversal.

Personal Notes on Demark Patterns

by Emmanuel Nyemera, PhD
the Stochastics bullish reversal.
c. Trail a buy-stop to go long above the
high of the Bar satisfying the Bishop
rule (ADX). ADX readings of over 40,
and particularly over 60, have an
excellent record of excellent buying
opportunities.
d. Evaluate the lower time frames for TD
Sequential, TD Combo, or qualified TD
Lines breakouts.
e. Entry on the prior swing high violation
and the crossing of the 5-day EMA
above the 13-day EMA on daily charts,
or the crossing of the 8-bar EMA above
the 34-bar EMA on intraday charts.

Stop Loss

Expected
Profit Target

Trailing Stop
and Exit

Identify the TD Buy Setup bar with the lowest true

low and subtract the true range of that bar from its
true low.

The expectation would be for a return toward the

high range extreme of the current TD Buy Setup,
i.e. TDST Resistance. Buy if the expected return >=
2*Capital Exposure (Risk)
Single in/Scale out Money Management System
and the Bishop Rule. Always enter with at least 2
units, one unit is to be exited when profit=risk.

c. Trail a sell-stop to go short below the low of

the bar satisfying the Bishop rule (ADX). ADX
readings of over 40, and particularly over 60,
have an excellent record of excellent selling
opportunities.

Stop Loss

Expected
Profit
Target

Trailing
Stop and

d. Evaluate the lower time frames for TD

Sequential, TD Combo, or qualified TD Lines
breakouts .
e. Entry on the prior swing low violation and the
crossing of the 5-day EMA below the 13-day
EMA on daily charts, or the crossing of the 8bar EMA below the 34-bar EMA on intraday
charts.
Identify the TD Sell Setup bar with the highest true high
and add the true range of that bar to its true high.

The expectation would be for a return toward the low

range extreme of the current TD Sell Setup, i.e. TDST
Support. Sell if the expected return >= 2*Capital Exposure
(Risk)
Single in/Scale out Money Management System and the
Bishop Rule. Always enter with at least 2 units; one unit is
to be exited when profit = risk.

Personal Notes on Demark Patterns

by Emmanuel Nyemera, PhD
Strategy

Trail stop using the Swing high violation and

oscillator reversal strategy: An oscillator bullish
reversal and a swing high must be taken out
before the stop los is adjusted. It doesnt matter
which event occurs first but they must both occur.

Intersection
Applicable to
stocks only

Exit
Strategy

Trail stop using the Swing low violation and oscillator

reversal strategy : An oscillator bearish reversal and a
swing low must be taken out before the stop los is
adjusted. It doesnt matter which event occurs first but
they must both occur.

Intersection
Intersection requires that the high of trading bar
8 of the Buy Setup, or of the first subsequent bar
thereafter, be greater than or equal to the low
three or more trading bars earlier, up to and
including the first bar of the TD Buy Setup. For
intersection to be fulfilled, the high of bar 8 of a
buy setup must be greater than or equal to the low
of bars 5, 4, 3, 2 or 1 of the buy setup. If this
requirement is not met, then the high of bar 9 of
the buy setup must be greater than or equal to the
low of buy setup bar 6 or any other price bar back
to bar 1 of the buy setup. If this is not fulfilled, then
each successive price bar is compared until its high
is greater than or equal to the low of the price bar
three or more price bars earlier back to bar 1 of the
buy setup. If intersection occurs on price Setup

bar 8 or 9, then the buy Countdown begins on

the 9 bar. If the intersection occurs after the
completion of the buy Setup, then the buy
Countdown can start at that bar.

Conventional TD Sequential Buy Countdown

Applicable
to stocks
only

Intersection requires that the low of bar 8 of the Sell

Setup, or of the first subsequent trading bar thereafter, be
less than or equal to the high three or more trading bars
earlier, up to and the first bar of the Sell Setup. For
intersection to be fulfilled, the low of bar 8 of a sell setup
must be lower than or equal to the high of bars 5, 4, 3, 2 or 1
of the sell setup. If this requirement is not met, then the low
of bar 9 of the sell setup must be lower than or equal to the
high of sell setup bar 6 or any other price bar back to bar 1 of
the sell setup. If this is not fulfilled, then each successive price
bar is compared until its low is lower than or equal to the high
of the price bar three or more price bars earlier back to bar 1
of the sell setup. If intersection occurs on price Setup bar 8

or 9, then the sell Countdown begins on the 9 bar. If the

intersection occurs after the completion of the sell Setup
phase, then the sell Countdown can start on that bar.

Conventional TD Sequential Sell Countdown

Personal Notes on Demark Patterns

by Emmanuel Nyemera, PhD
Beginning

Count

Cancellation

Bar 9 of the Buy Setup

13 price bars. To qualify as a Buy Countdown
bar, the bar must have a CLOSE <= LOW two
trading bars earlier. For very short time frames,
the bar must have a CLOSE < LOW two trading
bars earlier.

Beginning

Count

Bar 9 of the Sell Setup

13 price bars. To qualify as a Sell Countdown bar, the bar
must have a CLOSE >= HIGH two trading bars earlier. For
very short time frames, the bar must have a CLOSE > HIGH
two trading bars earlier.

1. Price rallies and posts a true low above

TDST Resistance

1. Price declines and posts a true high below TDST

Support

2.

2. Reverse Setup. Price declines and generates a Buy

Setup before the completion of the TD Sell
Countdown.

Reverse Setup. Price rallies and

generates a Sell Setup before the
completion of the TD Buy Countdown.

3. Any new Buy Setup whose true range

(the difference between its highest true
high and its lowest true low) is smaller
than the true range of the prior Buy
Setup or greater than 1.618 times the
true range of the prior Buy Setup is
ignored and the prior Buy Setup remains
the active Buy Setup and its Countdown
phase continues.
4. Within Setup (Setup contained with the
previous setup). This setup cancellation
occurs when a setup recycles but the
extreme high close and the extreme low
close of the recently completed buy
Setup phase are contained within the
extreme high and the extreme low of

Cancellatio
n

3. Any new Sell Setup whose true range (the

difference between its highest true high and its
lowest true low) is smaller than the true range of
the prior Sell Setup or greater than 1.618 times
the true range of the prior Sell Setup is ignored
and the prior Sell Setup remains the active Sell
Setup and its Countdown phase continues.
4. Within Setup (Setup contained with the previous
setup). This setup cancellation occurs when a
setup recycles but the extreme high close and the
extreme low close of the recently completed sell
Setup phase are contained within the extreme
high and the extreme low of the previously
completed sell Setup. In this case, the current sell
setup is ignored and the previous sell Setup is
dominant and its Countdown phase remains intact.

Personal Notes on Demark Patterns

by Emmanuel Nyemera, PhD
the previously completed buy Setup. In
this case, the current buy setup is
ignored and the previous buy Setup is
dominant and its Countdown phase
remains intact.

5. Extended Setup. If Setup bars extend to 18, the

Countdown is cancelled and an R appears where
the countdown bars 13 would otherwise be.

5. Extended Setup. If Setup bars extend to

18, the Countdown is cancelled and an
R appears where the countdown bars
13 would otherwise be.
1. A new Buy Setup occurs before, on, or
after completion of the TD Buy
Countdown and prior to a bullish price
flip (which perfects the Buy Countdown)
and its true range is equal to, or greater
than, the size of the previous TD Buy
Setup but less than 1.618 times its true
range. The TD Buy Setup with the larger
true range becomes the active TD Buy
Setup and the Countdown phase
associated with it is the valid one.
Recycling

Qualifier

2. Extended Setup. A Recycle occurs when Recycling

a new TD Buy Setup which started
before, on, or after completion of
the Buy Countdown and prior to a
bullish price flip extends to 18 bars- that
is 18 closes, with each one less than the
close 4 price bars earlier.
CLOSE of bar 13 of TD Buy Countdown <= CLOSE
of bar 8 of Buy Countdown OR the LOW of bar
Qualifier

1. A new Sell Setup occurs before, on, or after

completion of the Sell Countdown and prior to a
bearish price flip (which perfects the Sell
Countdown) and its true range is equal to, or
greater, the size of the previous TD Sell Setup but
less than 1.618 times its true range. The TD Sell
Setup with the larger true range becomes the
active TD Sell Setup and the Countdown phase
associated with it is the valid one.

2. Extended Setup. A Recycle occurs when a new TD

Sell Setup which started before, on, or after
completion of the Buy Countdown and prior to a
bearish price flip extends to 18 bars that is 18
closes, with each one greater than the close 4
price bars earlier.
CLOSE of bar 13 of TD Sell Countdown >= CLOSE of bar 8 of
Sell Countdown OR the HIGH of bar 13 of TD Sell

Personal Notes on Demark Patterns

by Emmanuel Nyemera, PhD

TD Termination
Count

Entry
Techniques

13 of Buy Countdown <= CLOSE of bar 8 of the

TD Buy Countdown
In order to prevent the possibility of TD Buy
Countdown proceeding to 12 and price reversing
without recording the 13th bar of the TD Buy
Countdown, you can use the open or the low,
instead of the close, and compares it to the low
two price bars earlier. This applies only to the
last bar, the 13th bar, of the TD Buy Countdown.
TD Termination Count states that all that is
required to record the final price of a buy
Countdown would be for the close, the open, or
the intrabar low to be less than the low two
price bars earlier.
1. Buy on the close
2. Alternative entry methods :
a. Buy on the reversal bar, the signal
bar, the snap-back bar or the
reversal confirmation bar
b. Trail a buy-stop to go long 5
pips+the pip spread above the 1BH
following the DTOsc bullish reversal
c. Trail a buy-stop to go long above the
high of the Bar satisfying the Bishop
rule (ADX)
d. Evaluate the lower time frames for
TD Sequential, TD Combo, or
qualified TD Lines breakouts
e. Swing high violation and moving
average crossover.

Countdown >= CLOSE of bar 8 of TD Sell Countdown

TD
Terminatio
n Count

In order to prevent the possibility of TD Sell Countdown

proceeding to 12 and price reversing without recording the
13th bar of the TD Sell Countdown, you can use the open or
the high, instead of the close, and compares it to the high
two price bars earlier. This applies only to the last bar, the
13th bar, of the TD Sell Countdown.
TD Termination Count states that all that is required to
record the final price of a sell Countdown would be for the
close, the open, or the intrabar high to be greater than the
high two price bars earlier.

Entry
Techniques

1. Sell on the close

2. Alternative entry methods :
a. Sell on the reversal bar, the signal bar, the
snap-back bar or the reversal confirmation bar
b. Trail a sell-stop to go short 5 pips + the pip
spread below the 1BL following the DTOsc
bearish reversal
c. Trail a sell-stop to go short below the high of
the bar satisfying the Bishop rule (ADX)
d. Evaluate the lower time frames for TD
Sequential, TD Combo, or qualified TD Lines
breakouts
e. Swing low violation and moving average
crossover.

Personal Notes on Demark Patterns

by Emmanuel Nyemera, PhD

Initial Stop Loss

a) Find the bar with lowest true low

throughout the entire TD Buy Setup
and TD Sequential Buy Countdown
process, whether or not it is a
numbered price bar;
b) Calculate its true range (difference
between its true high and its true
low); and
c) Subtract that true range from that
bar's true low

Initial Stop
Loss

d. An alternative stop-loss technique is to identify

the TD Buy Setup bar with the highest true high
and to add to its high the difference between its
high and close.

d) An alternative stop-loss technique is to

identify the TD Buy Setup bar with the
lowest true low and to subtract from its
low the difference between its close
and low.

Single In/Scale Out Money Management System.

Trailing Stop
and Exit
Strategy

Adust the Stop Loss following a Swing high

violation and an oscillator bullish reversal .
Always watch the ADX for the Bishop Rule

TD Sequential Reinforcement Pattern (9-13-9)

1. The TD Buy Setup must not begin before

a. Find the bar with highest true high throughout

the entire TD Sell Setup and TD Sequential
Sell Countdown process, whether or not it is a
numbered price bar;
b. Calculate its true range (difference between its
true high and its true low); and
c. Add that true range at that bar's true high

Single In/Scale Out Money Management System.

Trailing
Stop and
Exit
Strategy

Adjust the Stop Loss following a Swing low violation and an

oscillator bearish reversal.
Always watch the ADX for the Bishop Rule.

TD Sequential Reinforcement Pattern (9-13-9)

1. The TD Sell Setup must not begin before or on the

Personal Notes on Demark Patterns

by Emmanuel Nyemera, PhD

Validation

or on the same price bar as the

completed TD Buy Countdown,
2. The ensuing TD Buy Setup must be Validation
preceded by a bullish Price Flip, which
perfects the Buy Countdown, and
3. There must be no completed TD Sell
Setup prior to the appearance of the TD
Buy Setup
Note : This pattern is most effective if the lowest close
of the Buy Setup formed after the 13 bar of the TD
Buy Sequential Countdown is contained by the low of
the classic TD Buy Sequential.

Stop Loss

Subtract the true range of the price bar with the

lowest true low in the TD Buy Countdown and
ensuing TD Buy Setup from the true low of that
bar.

same price bar as the completed TD Sell

Countdown,
2. The ensuing TD Sell Setup must be preceded by a
bearish Price Flip, which perfects the Sell
Countdown, and
3. There must be no completed TD Buy Setup prior to
the appearance of the TD Sell Setup
Note : This pattern is most effective if the highest close of the Sell
Setup formed after the 13 bar of the TD Sell Sequential
Countdown is contained by the high of the classic TD Sell
Sequential.

Stop Loss

Add the true range of the price bar with the highest true
high in the TD Sell Countdown and subsequent TD Sell
Setup to the true high of that bar

Personal Notes on Demark Patterns

by Emmanuel Nyemera, PhD

Aggressive TD SequentialBuy Countdown

Count

Qualifier

13 price bars. To qualify as an Aggressive TD

Sequential Buy Countdown bar, the bar must
have a LOW <= LOW two trading bars earlier.
LOW of the Aggressive TD Sequential Buy
Countdown bar 13 <LOW of the Aggressive TD
Sequential Buy Countdown bar 8

TD Combo Buy Countdown version I

Requirements

These conditions must be satisfied

simultaneously :
1. CLOSE <= LOW two price bars earlier
2. LOW <LOW of the previous price bar
3. CLOSE < CLOSE of the previous price
bar
4. CLOSE <CLOSE of the previous
numbered TD Combo Buy Countdown
price bar
Note : The first bar of the TD Combo Buy
Countdown satisfy the first 3 conditions only.

Aggressive TD SequentialSell Countdown

Count

Qualifier

13 price bars. To qualify as an Aggressive TD Sequential

Sell Countdown bar, the bar must have a HIGH >= HIGH
two trading bars earlier.
HIGH of the Aggressive TD Sequential Sell Countdown bar
13 >HIGH of the Aggressive TD Sequential Sell Countdown
bar 8

TD Combo Sell Countdown version I

These conditions must be satisfied simultaneously :
1. CLOSE >= HIGH two price bars earlier
2. HIGH > HIGH of the previous price bar
3. CLOSE > CLOSE of the previous price bar
Requirements
4. CLOSE >CLOSE of the previous numbered TD
Combo Sell Countdown price bar
Note : The first bar of the TD Combo Sell Countdown satisfy
the first 3 conditions only.

Personal Notes on Demark Patterns

by Emmanuel Nyemera, PhD

TD Combo Buy Countdown version II

Requirements

Bar 1 to bar 10 of the TD Combo Buy

Countdown Version 2 satisfy the same
conditions as in version 1 :
1. CLOSE <= LOW two price bars earlier
2. LOW < LOW of the previous price bar
3. CLOSE < CLOSE of the previous price
bar
4. CLOSE <CLOSE of the previous
numbered TD Combo Buy Countdown
price bar
However, TD Combo Buy Countdown bars 11,
12 and 13 satisfy 2 conditions only :
5. CLOSE < CLOSE of the previous price
bar
6. CLOSE <CLOSE of the previous
numbered TD Combo Buy Countdown
price bar

TD Combo Sell Countdown version II

Bar 1 to bar 10 of the TD Combo Sell Countdown Version 2
satisfy the same conditions as in version 1 :
1. CLOSE >= HIGH two price bars earlier
2. HIGH > HIGH of the previous price bar
3. CLOSE > CLOSE of the previous price bar
4. CLOSE >CLOSE of the previous numbered TD
Combo Sell Countdown price bar
However, TD Combo Sell Countdown bars 11, 12 and 13
satisfy 2 conditions only :
1. CLOSE > CLOSE of the previous price bar
Requirements
2. CLOSE >CLOSE of the previous numbered TD
Combo Sell Countdown price bar

Personal Notes on Demark Patterns

by Emmanuel Nyemera, PhD
TD Combo Buy Reinforcement Pattern ( 9-13-9)

Validation

1. The TD Buy Setup must not begin

before or on the same price bar as the
completed TD Buy Countdown,
2. The ensuing TD Buy Setup must be
preceded by a bullish Price Flip, which
perfects the Buy Countdown, and
Validation
3. There must be no completed TD Sell
Setup prior to the appearance of the
TD Buy Setup
Note : This pattern is most effective if the lowest
close of the Buy Setup formed after the 13 bar of
the TD Combo Buy Countdown is contained by the
low of the classic TD Combo Buy

Aggressive TD Combo Buy Countdown

Requirements

TD Combo Sell Reinforcement Pattern ( 9-13-9)

All following conditions must be satisfied

simultaneously:
1. LOW <= LOW two price bars earlier
2. LOW < LOW of the previous price bar
3. LOW < LOW of the previous numbered
TD Combo Buy Countdown price bar
Note : The first bar of this new TD Combo Buy
Countdown satisfy the first 2 conditions only.

1. The TD Sell Setup must not begin before or on the

same price bar as the completed TD Sell
Countdown,
2. The ensuing TD Sell Setup must be preceded by a
bearish Price Flip, which perfects the Sell
Countdown, and
3. There must be no completed TD Buy Setup prior to
the appearance of the TD Sell Setup
Note : This pattern is most effective if the highest close of the Sell
Setup formed after the 13 bar of the TD Combo Sell Countdown
is contained by the high of the classic TD Combo Sell.

Aggressive TD Combo Sell Countdown

The following conditions must be satisfied simultaneously :
1. HIGH >= HIGH two price bars earlier
2. HIGH > HIGH of the previous price bar
Requirements
3. HIGH > HIGH of the previous numbered TD Combo
Sell Countdown price bar
Note : The first bar of this new TD Combo Sell Countdown
satisfy the first 2 conditions only.

Personal Notes on Demark Patterns

by Emmanuel Nyemera, PhD
Suggested Readings
DeMark, Thomas R., The new science of technical analysis, New York : Wiley,

c1994

DeMark, Thomas R., New market timing techniques : innovative studies in market rhythm & price exhaustion, New
York : Wiley, 1997
DeMark, Thomas R., & DeMark, Thomas R. Jr., DeMark On Day Trading Options, MacGraw Hill, 1999
Tom Demark, Trend Spotting with TD Combo, in David Keller, Breakthroughs in Technical Analysis : New Thinking from the Worlds
Top Minds, pp. 25-34
Tom Demark on indicators and market timing, in The Technical Analyst (www.technicalanalyst.co.uk), Issue 21, March/April 2007,
pp. 20-26
Trevor Neil, Demark Indicators on CQG
Kurt Magnus, Impressive Signals from Demark, in The Technical Analyst, September/October 2004, pp. 20-24
Perl, Jason, DeMark indicators, New York, NY : Bloomberg Press, 2008
Trevor Neil, Demark Indicators on CQG, 2007, 63 pages
Tom Demark and Rocke Demark, Countertrend forex trading with TD Sequential, Currency Trader magazine,
January 2005, pp. 28-33
Lindsay Glass, Demarking trend exhaustion zones, Active Trader (activetradermag.com), July 2002, pp.64-67
Bloomberg, Technical Analysis: Demark Indicators, 20 May 2005, version: 2.00, 46 pages.
Jason Perl Interview, The Technical Analyst, Issue 30, October 2008, pp. 41-44
Trevor Neil, TD-Wave: A rule-based approach to Elliott Wave Analysis, Technical Analysis, Issue 30, pp. 32-33

Personal Notes on Demark Patterns

by Emmanuel Nyemera, PhD
Aspen Graphics, DeMark Studies Users Guide, 114 pages
Marco Lissandrin , Statistical Testing of DeMark Indicators in Commodity Futures Markets, Master Thesis, Department of
Management, Technology, and Economics, Swiss Federal Institute of Technology Zurich, August 2014, 86 pages.