What is the DeMarker indicator?

Thomas DeMark - father of the DeMarker indicator

The DeMarker indicator is an oscillator - like RSI or Stochastic. This indicator was created by Thomas DeMark, a world-renowned technical analyst who created many other technical analysis tools and indicators.

The DeMarker indicator is also known as the DeM

Where is the DeMarker indicator on MetaTrader 4?

Traders find the DeMarker indicator at the link as shown in the image below

DeMarker indicator belongs to the group of Oscillator indicators

The formula for calculating DeMarker indicator

The DeMarker indicator is formed from the following steps

Choose a certain X period (default value on Metatrader 4 is 14. Trader can choose X longer or shorter. Short X will be more price-sensitive but appear more noise, long X is less sensitive. with price but little interference)

DeMax = Get the price peak in period X - the peak in period X before (X-1) to get the difference greater than 0. In case this difference = <0, then DeMax = 0

DeMin = Get the bottom of the previous period's price (X-1) - the bottom of this period's price to get the difference greater than 0. In case this difference = <0, then DeMin = 0

DeM = MA of DeMax / (Ma of DeMax + MA of DeMin)

* MA is the Moving Average

How to trade using DeMarker indicator

A few points to note when trading with DeMarker indicator

  • The DeMarker indicator oscillator between 2 polar regions of 0 and 1
  • The 0 to 0.3 zone is the oversold zone, potentially a bearish to bullish reversal
  • The 0.7 to 1 zone is an overbought zone, potentially a reversal from bullish to bearish
  • Other trend indicators can be combined to trade with DeMarker to increase efficiency
  • If Trader has the experience, you can use the DeMarker indicator to look for divergences between price and DeMarker. This is also an effective trading signal

Basic usage of DeMarker with overbought and oversold zones

Filter DeMarker signals for trend following and not trade against trend reversal signals

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