Demarker Indicator
Tue, Apr 15The Demarker Indicator is a technical analysis tool created by Tom Demarker to pinpoint high-risk buying or selling zones within a market. There are two versions of the Demarker Indicator: one ranges from -100 to 100, while the other spans from 0 to 1. The fundamental concept behind the Indicator remains consistent in both cases.
If the high price during a specific period exceeds the high of the previous period, the DeMax variable for that period is calculated as the difference between these highs. Similarly, the DeMin variable is determined for the low prices. The Demarker Indicator is then derived as the moving average of DeMax divided by the total of the moving averages of both DeMax and DeMin. Consequently, a higher DeMax value in relation to DeMin results in a greater Demarker Indicator value.
On the 0 to 1 scale of the Demarker Indicator, a value above 0.7 suggests that a downward price shift is likely to occur soon, while a value below 0.3 indicates an impending upward price movement. Values falling between 0.3 and 0.7 represent relatively low-risk periods for entering a specific asset market. Therefore, astute traders can utilize the Demarker Indicator to decide when to enter a market or when to buy or sell an asset to take advantage of anticipated price trends.
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