DeMARK TD Sequential & RSI combination Tutorial 3

Hello everyone,

This tutorial is designed to help you understand TD Sequential and assess its strength when combined with the RSI indicator.
Please like and share if you find it useful :)

Also if you have any question, feel free to add any comment below.


We're going to study the daily bear trend displayed on the chart above:



STEP 1: SETUP

FROM 06/27 TO 07/09

The very first step of a trend initiation is the Price Flip.
A bearish price flip indicates a switch from positive to negative momentum.

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Definition:
A Bearish TD Price Flip occurs when the market records a close greater than the close four bars earlier,
Immediately followed by a close less than the close four bars earlier.
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In our example, the bearish Price Flip starts on June 27 and mark the candle #1 of the SETUP

From the bearish Price Flip can initiate the SETUP which is nine consecutive closes, each one less
than the corresponding close four bars earlier. (FROM 06/27 TO 07/09)



STEP 2: COUNTDOWN = TREND

FROM 07/16 TO 10/21

Once a SETUP is completed, a trend can be triggered at any moment.
The trending system is expressed by a countdown displayed by circled numbers from 1 to 12 then by a special character until 55.

Requirements for a bearish TD Countdown:
- It doesn’t have to be a consecutive sequence.
- Count only increase if the bars close higher/lower or equal to the high/low 2 bars earlier
- Bar 9 of the setup can also be included if it fulfills the previous condition

In our example, the bearish Countdown starts on July 16 just above the TDST Support line.
The TDST Support line is then pierced on July 23 with bar 3 of the countdown.

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Definition:
TDST Levels (TD Setup Trend level helps to determine the underlying directional bias):
- TDST Support is a GREEN dotted line (Formed after valid sell setup)
- TDST Resistance is a RED dotted line (Formed after valid buy setup)
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STEP 3: EXHAUSTION POINTS

These Points are based on the Fibonacci sequence: 13, 21, 34 and 55.
Countdowns calculate the length of the trend to identify the points of its fading when one of these numbers is reached.
This can then lead to a reversal of the trend.

In our example, the bearish countdown shows potential exhaustion points on August 30 and September 2, 2019.
These points are considered as weak because the RSI indicator makes new lows at this moment.

In fact, the main sequential countdown continues between September 2 and October 09.

More relevant exhaustion points are then reached on September 30 and October 09.
Combined with the RSI indicator, it confirms a strong bullish divergence.


The RSI indicator then crosses the median line and confirms the buy signal.
On October 21, the bearish countdown was definitively canceled by a new SETUP in the opposite direction.
This new SETUP also triggers a bullish countdown.

On November 1, the countdown is on a bar 4/13 indicating a potential continuation of the upward trend.


Enjoy!

MATHR3E



Sequential indicators:


MATHR3E TD Multi Sequential
https://fr.tradingview.com/script/eQ9fp16K-MATHR3E-TD-Multi-Sequential/

MATHR3E TD Setup Trend
https://www.tradingview.com/script/CEQRlFuo-MATHR3E-TD-Setup-Trend/

MATHR3E TD Sequential Fibonacci Extension
https://www.tradingview.com/script/I13r6XZN-MATHR3E-TD-Sequential-Fibonacci-Extension/

MATHR3E TD Aggressive Fibonacci Extension
https://www.tradingview.com/script/SJ2HKoGd-MATHR3E-TD-Aggressive-Fibonacci-Extension/

MATHR3E TD Combo Fibonacci Extension
https://www.tradingview.com/script/Ct4YO6WO-MATHR3E-TD-Combo-Fibonacci-Extension/