Weekly Buy/Sell strategies using Tom Demark TDSETUP

[magictrader]

In each year since 2006, this strategy would have produced 3 winners and 0 losers.

In simplest form, the Tom Demark TDSETUP system counts the number of consecutive weeks that this is true for downtrends

Bar[Close,W,0] < Bar[Close,W,4]

and for uptrends

Bar[Close,W,0] > Bar[Close,W,4]

I have a much more thorough discussion of the exact screeners and formulas on this post:

http://www.onlinetradersforum.com/showthread.php?t=132473

The idea of using this on a Weekly chart is to wait for the weekly count to reach -9 or greater, and buy when it flips. As we know just because something goes down 9 weeks in-a-row doesn't mean it can't keep going down. But once the trend reverses, then you can trigger an action.

Waiting for the uptrend count to reach +9 or higher, then selling when the count flips, would be the exit strategy. Stop-Loss would be under the most recent Weekly pivot low.

Here is an example chart on the Nasdaq100 ETF (QQQQ), showing the Buy signals, Stop Loss (Yellow lines), and Sell Signals

http://chart.ly/assets/tnez55.jpg

Backtesting results:

QQQQ Demark 9 Buy 8/13/2006 $36.53
QQQQ Demark 9 Sell 12/24/2006 $42.93 (+17.52%)
QQQQ Demark 9 Buy 3/30/2008 $43.49
QQQQ Demark 9 Sell 6/15/2008 $48.37 (+11.22%)
QQQQ Demark 9 Buy 12/14/2008 $29.68
QQQQ Demark 9 Sell 5/24/2009 $33.54 (+13.01%)

It missed the run in 2007, but got you back in-and-out just before the crash in 2008. The average holding period is around 4 months.


Demark Weekly Oversold Screener:

To scan for stocks that are currently oversold, meaning 9 or more consecutive weeks in a downtrend:

{Downtrend Count at 9 or higher}
(
Bar[Close,W,0] < Bar[Close,W,4] AND
Bar[Close,W,1] < Bar[Close,W,5] AND
Bar[Close,W,2] < Bar[Close,W,6] AND
Bar[Close,W,3] < Bar[Close,W,7] AND
Bar[Close,W,4] < Bar[Close,W,8] AND
Bar[Close,W,5] < Bar[Close,W,9] AND
Bar[Close,W,6] < Bar[Close,W,10] AND
Bar[Close,W,7] < Bar[Close,W,11] AND
Bar[Close,W,8] < Bar[Close,W,12]
)

Demark Weekly Overbought Screener:

To scan for stocks that are currently overbought, meaning 9 or more consecutive weeks in a uptrend:

{Uptrend Count at 9 or higher}
(
Bar[Close,W,0] > Bar[Close,W,4] AND
Bar[Close,W,1] > Bar[Close,W,5] AND
Bar[Close,W,2] > Bar[Close,W,6] AND
Bar[Close,W,3] > Bar[Close,W,7] AND
Bar[Close,W,4] > Bar[Close,W,8] AND
Bar[Close,W,5] > Bar[Close,W,9] AND
Bar[Close,W,6] > Bar[Close,W,10] AND
Bar[Close,W,7] > Bar[Close,W,11] AND
Bar[Close,W,8] > Bar[Close,W,12]
)

[tigge88]

Hi,

I am just started to learn trading last month and went in at the wrong time as the market is up and down. By the way I am using ETRADE, may i know how can i scan the stock in Etrade or any other software. Hope to hear from you soon.

From Asia.

[TraderGuy]

Magictrader, thanks so much for your input. DeMark signals are most effective when used with a Countdown. Unfortunately I do not know of a way of modeling this into Strategy Desk. Do you?

[magictrader]

Yes look at my other post here which talks about it more on a Daily timeframe. Writing a scan to keep track of exact counts 1-2-3 etc would be way too slow, but my scan will only pay attention if the count is 9 or greater. Makes a more efficient scan of the market, but still should be done after-hours.

http://www.onlinetradersforum.com/showthread.php?t=132473

[bendexo]

Looking at your weekly bar formula I thought maybe you would consider

Entry
StochRSI[StochRSI,14,W] > StochRSI[StochRSI,14,W,1]

Exit
StochRSI[StochRSI,14,W] < StochRSI[StochRSI,14,W,1]

Good luck!

Bendexo