Thomas DeMark Tom DeMark, Sr. has spent over 31 years testing, trading, and teaching his ideas in all types of markets. Known for his mechanically driven, objective approaches to trading the markets, he has created numerous successful market timing models and indicators, which help traders to spot tops and bottoms in the markets. Books DeMark on Day Trading Options , McGraw-Hill, 1999 New Market Timing Techniques , John Wiley, 1997 New Science of Technical Analysis , John Wiley, 1994 Trading with technical analysis -
The trend is your friend UNLESS it is about to end. -
Markets bottom, not because of astute buyers , but because of an absence of sellers. -
Markets top, not because of astute sellers, but because of an absence of buyers. -
Anticipating trend reversals enables traders to purchase calls at the narrowest premiums and cheapest prices, and to purchase puts at the narrowest premiums and cheapest prices. -
Uniformity in calculating price retracements requires: -
the identification of the highest price high since price traded previously at the current price levels, in the case of an upside retracement, and -
the identification of the lowest price low since price traded previously at the current price levels, in the case of a downside retracement. -
Trading disqualified trendline breakouts far exceed the benefits derived from trading qualified trendline breakouts in the direction of the ongoing trend. Typically, price slippage and skidding occur when trading with the trend and when trading against the trend and anticipating price exhaustion zones, more reasonable price fills and trading opportunities arise. -
The determination of accumulation and/or distribution is best calculated by relating the current price with the market's opening rather than the prior price period's close. -
Duration, or the amount of time an oscillator remains overbought or oversold, determines a market's susceptibility to a rally rather than oscillator and price divergences. -
Markets tend to operate in a trading range 70-75% of the time and trend 25-30% of the time. Consequently, any moving average time period should be equally effective in a trending market and no moving average is effective in a trading range market. Conversely, oscillators that identify areas of overbought and oversold are most effective in trading range or sideways markets. -
Exponentially calculated oscillators can contaminate price data since these values remain within the data series until the security suspends trading. On the other hand, arithmetic averages are removed once the time period expires . www.tomdemark.com |