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Hi Guys,
Has anyone coded any Tom Demark indicators. I found this moving average
description on the internet and was wondering if anyone else had them.
Regards
Steve
Benefit
TD Moving Average 1is a study used to identify trend reversals before
and as they occur so you can plan your entry and, in particular, exit
strategies.
Description
CALCULATION OF TD MOVING AVERAGE
To identify potential upside breakouts, an upper moving average is
calculated and plotted as follows:
(1) The lowest true high recorded within the last 13 price bars
(including the current price bar) activates the moving average selection
process. The true high is the high of a price bar or the prior price
bar's close, whichever is greater.
(2) That particular price bar's true high is then added together with
the true highs of the previous 4 price bars, then averaged, and finally
the calculated value is plotted above the high of the current price bar
(the lowest true high price bar).
(3) This calculation is continued for an additional 3 price bars and
then is extinguished UNLESS a subsequent true high price bar has been
recorded which is less than ALL previous 12 price bar highs. If this
occurs, this calculation is once again continued for an additional 3
price bars.
(4) Once a closing price bar is recorded above TD Moving Average 1™,
this indicates a potential breakout. This breakout needs to be confirmed
by the next trading bar opening above the breakout close AND the high of
the trading bar must be above that same price bar's open. When these
criteria are met, a legitimate upside breakout occurs. Any outstanding
short positions should be liquidated, since it is recommended that TD
Moving Average 1™ be used as an exit method or as a trend validation
indicator, not necessarily as a low risk entry indicator.
5) If no moving average plot appears on the chart, the moving average is
not active and the suggested decision rules can be ignored.
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