DeMarker

DeM – DeMarker

DeMarker Technical Indicator is based on the comparison of the current bar maximum with the previous one. If the previousbar maximum is lower than that of the current, the respective difference between two is registered. If it is higher or equal to the current, the nought value is registered. The differences received for N periods are then summarized used as the numerator of the DeMarker. Then the numerator is divided by the same value plus the sum of differences between the price minima of the previous and the current bars. If the price minimum of the current period is higher than that of the previous, the nought value is registered.

When the indicator is below 30, the upward price reversal should be expected. When the indicator rises above 70, the downward price reversal should be expected.

Using longer periods when calculating the indicator helps to catch the long term market tendency. Indicators based on short periods let you plan the transaction time so that it falls in with the major trend.

Calculation:

The value of the DeMarker indicator for the i interval is calculated as follows:

• The DeMax (i) is calculated
  If HIGH (i) > HIGH (i – 1) , then DeMax (i) = HIGH (i) – HIGH (i – 1),
  otherwise DeMax (i) = 0
• The DeMin (i) is calculated
  If LOW (i) < LOW (i – 1), then DeMin (i) = LOW (i – 1) – LOW (i),
  otherwise DeMin (i) = 0
• DeMarker indicator is calculated:
  DMark (i) = SMA (DeMax, N) / (SMA (DeMax, N) + SMA (DeMin, N))

Where:

HIGH (i) – current bar maximum price;
LOW (i) – current bar minimum price;
HIGH (i – 1) – previous bar maximum price;
LOW (i – 1) – previous bar minimum price;
SMA – simple moving average;
N -  number of periods used in the calculation.

Similar information about indicators you can find in information system of trade platform MetaTrader 4 (Help-> Help Topics [F1] -> Ananlitics -> Technical Indicators).