TD Sequential Signals from Trend Setup and Price Counts
Summary
The document describes a TD-style timing system attributed to Thomas DeMark. It begins with a setup: compare each close with the close a fixed number of bars earlier, and require that relationship to persist for a specified run of bars. A falling sequence starts a buy count, while a rising sequence starts a sell count. Subsequent bars add to each count only when specified close and high or low comparisons are satisfied; reaching a configured count produces a signal. A new setup in the same direction cancels an unfinished count.
The example applies the signals to the CSI 300, switching between fully invested and fully out according to buy and sell signals. No backtest results or parameter values are supplied, and the source does not establish that the method is profitable. It warns that prolonged trends can cause signals to arrive after much of a move, followed by short-term movement against the signal. It recommends adding stop-loss controls and notes that any timing rule can be defeated by adverse price patterns.
Key ideas
- A persistent close-versus-prior-close relationship defines the initial trend setup.
- Buy and sell counts advance only when their respective close and high or low tests pass.
- A new setup cancels an unfinished count in the same direction.
- The example alternates between full investment and no position in the CSI 300.
- Signals may lag extended moves, and the document provides no performance evidence.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.