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Sunday, 02/19/2012 10:56:32 AM

Sunday, February 19, 2012 10:56:32 AM

Post# of 138
Demark’s Trend Lines

How would we know if what we search and studied for would benefit us at the end of our forex journey? Where in there are a lot of websites and articles that are claiming to be an online source. Tom Demark’s is one those authors and strategist as well as a trader himself who has proven his work in so many ways, and that is through his discoveries, theories and books.
With our previous post we have illiterate and introduce who Tom Demark is and provided you a brief background of his career and experience. Today, we will further discuss what he was famous for, the Tom Demark Trend Lines. I have given a few notes on how it works this time a step by step on how to draw the trend lines.
The book is consist of the following steps on how to use his trend lines analysis. First of all, It needs focus and understanding for you to fully absorb every word and even the charts that he is illustrating. Just like other finance and marketing strategy Tom Demark’s trend lines in general focus on currencies and determining the future price. He wants to avoid that you will commit the same mistakes as what other new traders often committed. As a guru Tom Demark’s goal is to guide you with a simple way using the obvious indicators that are available on the charts.
What is Trend Lines?
We always hear about trend being use in any discussions and analysis by traders but what is trend? Or in forex trading what is trend lines? Trend refers to the direction and how a subject turns out as the processor circumstances affects its change. It is also define as the pattern or motions that an individual follows or monitors during a period of time. In forex, trend is more often called trend line a term that traders refer to as the technical analysis. A diagonal trend lines happen when you follow and draw a specific direction from left to right.
Usually the trend lines connect point A to point B with the chart as it compares the previous price of the currency and the current one. A trend line is also or more oten use when they look at the perfect timing as when the entry or exit point will be when it comes to placing their trades. Making it an important tool to use when you are looking at the direction of the currency price on both major and minor pairs; it also indicate if the price trend goes out or down or if it bounce back or if you are expecting a reversal.
To follow the steps on drawing Tom Demark’s Trend Lines, must note terms that Tom Demark uses. These are the swing cycle high and swing cycle low. It indicates the direction of where the trend is heading. The very top trend is where you will find the candle’s wick that is in a swing high mode and the wick of a candle is noted higher than the trend from left to right. Meanwhile the bottom or the lower trend shows the candle’s wick is much lower than the direction from left to right. A regular swing direction is from left to right where it has a higher and lower level with regards on looking at the candles wick.
Steps to Draw Demarks’ Trend Lines
First we will define and lists how to draw the Tom Demarks trend lines in an uptrend direction. If you look at the chart, you must check the lower part of the candle and determine the current status of the candles wick. This is the bottom wick from the right to the left. Towards your left, find the past bottom wick that is much higher of the same direction from right to left. If you see those indicators you can now draw the trend line and this is from the recent lowest wick up to the past lowest wick. Finally, at the very end of that line draw it further towards your right and this time take it to a distance.
Now let’s take how to draw the Tom Demarks trend line from the bottom trend. The same as the uptrend, you must identify the higher wick of the chart and look for the current one which is more than the wicks from the right to left direction. On your left, determine the past high wick which is less than the candle wick from the direction right to left. You can now start to draw the trend line diagonally, and this is from the recent top wick to the past top wick illustrating it from the direction of right to left. After drawing the line take the very end of that line which usually stop on the recent top wick and draw an extensions line going forward to the right.
These two trend lines are what Tom Demark’s theory is all about. By following these pointers on how to use them you will be able to predict the future developments and movements of the price. Tom Demarks trend lines are often drawn with in the period of 5, 10 to 15 minutes on the charts. For other this is done daily and with point out gaps or in between 2 to 3 days of extensive comparisons on prices for both the current and previous dates. With simple math you will be able to find the difference and determine if the trend goes up or if it goes down. . Since events, interventions and even reversal happens and it affects the price action of the currency. This is a simple step that any of us whether you are a new trader or a seasoned trader could learn and grow of liking it.
Have you look into Tom Demarks Trend Lines Indicator? What do you think about his process would it work for you to? Please let us know by sending us your comments below. To find out more about foreign exchange or they market you can subscribe with our News letters or RSS Feed.
I hope I am able to contribute for your trading success.
Warm Regards
Wellsie Fisher

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