The DeMark Trading Strategy was developed by a guy called Tom DeMark. I don’t need to go into detail about who Tom DeMark is.
And as soon as these trendlines are broken, a trade is initiated.
This forex trading strategy may not be 100% actually as the original demark trading strategy because I’m going to add my own variation.
To keep it simple for you to understand and execute trading setups when you see them.
Timeframes: 15min upward to daily would be suitable.
Forex Indicators: Nil
The DeMark Trading Strategy Relies on you drawing trendlines. If you don’t know how to trendlines then here’s a brief lesson on drawing trendlines:
- There are only two types of trendlines: upward trendlines and downward trendlines.
- To draw upward trendlines, you find two “bottoms” of price moves and connect them and you have a trendline.
- To draw downward trendline, you find two “peaks” of price moves and connect them and you have a trendline.
- click here on more information on how to draw trendlines
DEMARK TRADING RULES
1: Draw your up and down trend lines on your chart.
2: Look out for a break of the trend line on the chart to signal trend direction
3: At the close of the candlestick that breaks out, place an pending (buy stop or sell stop order). That will be a few pips away from the high or low of the candlestick.
4: Use Previous Peaks or Bottoms as your take profit target.
5: Or you can use a trailing stop and place it behind the peaks and bottoms. As a trade moves profitably to lock in your profit.
Also Read About: Head And Shoulder Pattern Trading System
- with the demark trading system, you must draw trendlines based only on the most recent swings (peaks or bottoms).
- you can use 5mins, 15mins, 30mins, 1hr, 4hr or daily timeframe to trade this forex strategy.