TD Sequential: The Ultimate Guide to Reversals

**Watch the playlist above to learn about how TD sequential works

Tom Demark sequential is a time tested indicator that helps you identify potential reversal zones.  It is most effective on 1H time frame and above.

TD sequential’s ability to call market tops and bottoms are quite impressive

TD Sequential Indicator is Included in the TTB Algo Bot

  • Our unique version of the most famous demark indicators
  • Multi-Time Frame 8s and 9s

MTF 8s and 9s are included as an option inside TheTradingBot Algo for Tradingview

We suggest displaying 4H and Daily 8s and 9s as well as showing the current Time Frame 8s and 9s.

 Alerts can be added to all 8s and 9s for all 3 time frames

example on 1H chart showing 4H 8s and 9s

Tom Demark Sequential 9 Explained (video transcript)

TD Sequential is one of the best demark indicators.

Hey, how’s it going guys, as we all know the market, doesn’t go up in a straight line. There are always ups and downs, no matter what of invest, but have you wondered if there’s any way that it can allow us to take where exact the market will go up or go down? No matter if you are shorter and Twitter, we’re a long-term investor.

Wouldn’t it be great. If we can have a magical indicator that it can show us exactly when to sell the tops and the when to buy the dips, actually, there’s one such indicator who can do exactly that. In fact, this indicator was, it used to be exclusively adopted at the legendary traders like Steve Cohen, Nepal to the jobs in this video will help you guys understand how exactly this indicator works,

Tom Demark Sequential: how to use it in your own trading and investing. And also at the end of the video, I will show you guys how you can add this indicator to your chart in platform like trading view for absolutely free. So please make sure you watch the video to the end and a do not miss out anything. I promise you I will make it quick and don’t waste your time.

All right, let’s get started Before I show you the name of this indicator. Let me first show you how powerful this indicator is. Let’s pick a random stock, for example, square one of the hottest stocks. Recently, when we applied as indicated to the charts, we can clearly see when exactly the short-term market tops are in technical analysis. We call it shortened tops.

The swing highs, this indicator show us exactly the potential swing highs are. These are the places where the stock price is overheated, and we should stay away from this stock. Also out of the swing highs, this inner candle can show us where the swing lows are. We overheard people say by the depths, this swing lows are the best potential dips where you can enter your choice.

We’ll add more shares to our existing positions. Let’s take a look at another example. Here’s the daily chart of apple. Same thing. Once we add this indicator, we can instantly see where at a tops that we should stay away from and the, where are the dibs for us to buy more shares at the best price? Not only this indicator works on individual stocks,

TD Sequential works on broad indexes as well. In fact, this indicator actually successfully predict the massive stock market crash back in March, 2020, exactly three days before the crash. Also it precisely show us where the market bottom was. So if you had this indicator back in 2020, you will successfully get out of the markets three days before the crash. And you wouldn’t know exactly when to stop buying a dip where everyone else was panicking.

All right. So what exactly is this magical indicator? This indicator is called TD sequential indicator named after these original creator, Tom D mark, Tom D. Mark used to work for Paul to the Jones as a portfolio manager and vice president for tutor capital. And now he’s serving Steve co his personal special advisor for his hedge fund point 72. Tom D mark has created quite a lot of different technical indicators,

but this indicator called the McKnight is by far the most effective one on predicting the short-term market tops and bottoms. And also the easiest one for beginners to understand. So what is the secret of this demark night indicator and how exactly does it work? In technical analysis? We often say simple things work the best. The secret behind DMARC NAI is actually pretty simple in general,

Demark Indicators

their own two major categories of technical indicators. First category is called the momentum indicators, which help us to identify trends breakouts, and the trend of reversals. The other category is called oscillator indicators, which help us to identify overbought and oversold conditions in the market. And the mark nine belongs to the second category, which means essentially DMARC nine is a leading oscillator indicator that shows investors where the market is heavily overbought or oversold.

TD sequential : This is how demark nine works. It compares the current candlesticks closing price to the closing price of the candlestick four days ago. If the current closing price is higher than four days ago, and it will be considered bullish and it will be marked with a green number. On the other hand, if the current closing price is lower than four days ago, it will be considered bearish and a will be assigned with a red number.

The numbers shows how many days in a row that this market has closed above or below the price four days ago. And the most important number we’re looking for is number nine, for example, this is the daily chart of apple stock. If we add orange, the DMARC nine indicator, you will see something like this. We can see that there are two number nines showing up in his chart.

One is bearish and a one is bullish on the bearish side. This number nine indicates there have been nine days in a row that the daily closing price was lower than it was four days ago. And this is a very significant short-term oversold signal. Whenever the bearish number nine shows up and it usually means the market has potentially bothered in the short term. So this is usually a very good time to add more positions.

If the stock is on a clear uptrend and the bonus side is green collar. Number nine indicates there have been nine days in a row that the daily closing price was higher than it is four days ago. And this is an important short-term overbought signal whenever such bullish. Number nine shows up in the chart that usually indicates the stock is short and overheated, and we should expect a pullback coming soon.

Typically you should avoid buying. We’re adding more positions when this overbought number nine shows up, especially if this stock is in a clear downtrend. So that is pretty much how the DMARC night indicator works. The mathematical calculation behind that is indicator is extremely easy to understand, but also is extremely, extremely useful and effective before we move on. There’s one thing I do want to highlight here is that whenever you use a DMARC nine to make a buy or sell decision,

you have to analyze the current trend of the market. You’re trading first. If the stock you are watching is in a clear uptrend, then you only use the mark nine indicator to look for buy signals. If the stock is in clear downtrend, then you use the mark nine to look for sell signals, never, ever bet against the trend, especially if you’re a beginner.

All right. Just one last thing before I go, no matter how powerful indicator is, nothing is guaranteed in the financial market. So please always remember this. Investing in the trading is a game of probability, not Certainty and indicators. Ultimate job is to increase our probability of winning a stew. It is eventually our job to decide how much risk we are waiting to take for the potential rewards.

Always make sure you’re understanding your downside risk, respect, the risk, the protect, your downside, and your asset profits will take care of themselves. Especially if you have such a powerful indicator at the mark nine.

Tom Demark Bloomberg Interview (video transcript)

Well, let me also just point out why. In part, we listened to Tom going back over the past five years, he’s had a couple of very notable calls. What that actually, excuse me, that’s a red line. That’s a sell. He said, sell there. All right. Then he came in and he said, you buy that dip.

Then he came In your life has been a continuum. There’s really no defined times. As far as the day is concerned. I do arise sometimes one, two in the morning, consistent with the, the European markets and I follow the European markets, but I find that most of the, the time I have left to myself to do research is, is early in the mornings or late in the evenings.

Because throughout the day, I’m interrupted a number of times and obviously following the markets. So there are a lot of distractions during the day. Weekends are particularly busy for me because I’m able to devote time to what I like best, which is research markets behave the same as they have all throughout the past century. If you will. We’ve gone back since the 19 hundreds,

early 19 hundreds, and the indicators I developed in the 1970s and 19 early 1970s, mid 1970s are the same indicators, a few upgrades revisions of your call. If you described as such in the, in the 1980s, but basically the same indicators in early 1980s, once the one-minute charts of the, of sock stocks or individual stocks and futures were introduced,

we learned that the, the indicators had great application to the intraday market moves as well as the, the equity markets. He counts days Of exhaustion. I’ll explain that in just a moment, but 13 days, that’s his magic number. When you get 13 days of exhaustion you’re done right now, the count is only set. I find That the Fibonacci numbers,

which a lot of people apply currently to markets where we’re dominant in nature, and it could be applied to the markets as far as retracements initially. And I started with eight and 13, which were, which were Elliot, which were Fibonacci numbers. They adapted to nine and 13 because they had a better fit. And I was always struggling with the number nine because it was not a Fibonacci number.

TD Combo

But once we made a comparison with the closing price for nine consecutive buyers, with a closing price, four bars earlier than nine plus four equals 13, which was a Fibonacci number. And that resolved any conflict I had in my mind, Apply our indicators to things such as beer production and temperatures and migration trends. We apply also to, to, to DRAM inventory controls.

So the indicators we’ve developed, see they have a natural fifth throughout, throughout all parts of society. I’ve been around more than 42 years in the industry. And every two to four years, something new and fashionable gets introduced such as the option markets back in 19 72, 73 in Chicago bar option Chicago board options exchange. Everyone thought that that would influence the indicators. It really didn’t.

The TD sequential indicators seem to adapt and compensate for new, new introductions..

Tom Demark Discusses Trading The 9s (video transcript)

I got to tell you the Japanese. Yeah. And just in my familiarity with the people in the hedge fund business, there are a lot, a lot of people trading with the currency and the currency market is well over a hundred billion dollars a day. This is where all the action is. This is where all the big players are. They use leverage.

There’ve been a lot of people hurting this market this year. And if they had used this simple technique, like they wouldn’t have been heard, they would have been on the right side of the market. There are people who have gone out of business with billions of dollars, actually selling, which is a trend into these nine lows when they should have been buying.

Well, let me show you that this is a somewhat inactive back in June. We should probably use this number contract, but it would apply the same thing. Cause I was there. This closed greater than four trading days earlier, but we did a series of nine and what happened? The market turned here. Now, when I have to look at,

and this is not in the book, I stress that this is important for a setup. If you want to maybe trade these nines, day nine should be less than the low, the low. If you’re looking for a buyer set up the low on a particular day should be less than the low of day eight, the seven, but more importantly, day six.

And I’ll show you why as this thing unfolds, because this is something that was, is what happens. It’s still a good low, but what happens if you’re not less than specifically, the day nine is low is not less than the low of day six. You have another day down, over and over again, sees the reappear more and more where the market just finally cleans everybody out.

And I’ll say, for example, this low on nine had been greater than six. You would have seen another day down and then it would have turned if it was going to turn on at night, but let’s just go through these now. So you’ve got a nine here. It’s a low close. That’s another thing too. When you start looking at charts after a while,

if someone held a chart up over there, if I provide, I can see that far, I pick out the nights. I can just see them. My mind is just focused right at nights. I mean, this is my baby and I, I can see it anywhere. I can almost feel it. You know, the, the nines just appear over and over again where someone came to me.

Oh, a couple of weeks ago in Chicago, where I spoke at the Chicago mercantile exchange said, here’s a nine. I just looked at the charts and there’s no nine there. Yeah, there is. Look, look, look, look there. Wasn’t it was off by a tick. You just get a sense for it. After a while now,

one thing I want to stress before we go on though, too, these are nine consecutive bull print. With TD sequential, Consecutive closes less than the trading closes, the clothes four trading days earlier, not less than or equal to don’t get caught up in this last one. This one’s equal. So I’m going to count it. Don’t use the equals and we’ll show you examples where the equals should not be.

This isn’t a setup, but I’m also going to show you an improvement to the sequential countdown, where you do use equal, just not in the book. And it’s a real enhancement. And I’ll show you the example. After example, we’ll go from one to the other where I use equal in this thing is calling the precise high. But because you’re using,

you’re using greater than for the countdown, her less than less than for the countdown. This is not part of the setup. You’re missing trades. But as far as the setup concerned, you do not use equals. It’s gotta be less than for a buy setup. It’s gotta be greater than for a cell setup. But here at going through this, this nine was less than six.

So you’re all right. The market’s moving up. Do you wanna do a training mode? I chased the someone feature this system. They’ve set up a training mode so you can follow this day by day. You can see it unfolding here. There’s nine over there. You got a 200 point move Here, premature. Yeah. Just keep going this way.

You got a nine. You got to play here. I mean, this, this, these are, this is ninety six hundred and ninety seven fifty. It’s 150 points and the $1,250 per point. That’s about $1,900. Okay. Here’s a two. He’s just going to take you right through it. This is a great training session right here, which maybe you might want to look at it later just to get an appreciation for how it’s defining him.

1, 2, 3, 4, 5, 6, 7, 8, canceled out. Why don’t we cancel it out? We had eight consecutive closes greater than the close for trading days earlier. I’m going to get a nine. Oh, I’m all excited. I’m going to night. What happens? This particular close here is less than a trading close. 1, 2, 3, 4. What is happening? And I see this in the market.

The market’s Regeneron regenerating. That’s an equal closer. Is it equal, equal, Close? What the market’s doing? It’s regenerating. It’s really building power. If it had gone straight up with nine, you probably gonna get a, a, a short-term peak. What I call a stutter in the market. The market’s going to dig with breath and come down this particular case.

Hey, the market said, I tell you just from my own experience, I’ve got two close friends who use this religiously. One’s at one of the major, major mutual funds in the country. He’s been top five in performance this year. And as far as timing, he uses exclusively this. He doesn’t know all the nuances that you, people are going to know,

but he obviously has an appreciation for it. The other fellow is one of the major hedge funds. They both we’ve seen it time after time, where there’s equal. For example, in this setup was enough just to cancel it. And you sit there and you’ll watch the markets on the close the market. I’ll play around this point. So many times it’ll just gravitate to this level and it takes on a meeting.

There’s a real significance. There there’s dynamics within the market that I can’t express. I can’t explain, but they’re there. Now in this particular case, you canceled that each set up cell setup because you only with the H cell setup, as opposed to nine, you cancel that now movement, go back to that. Here’s the second there. Seven, you can see that there is eight that’s greater than four.

Not now use this close is greater. It’s gotta be greater because it’s the one there With all this. I’m sure it is because of the scaling that we’re having to do right Now up here is your first close, greater than the close four trading days earlier. There’s two, there’s three there. Sport is five gone. Why is it gone? Because this closes is less than the close forties earlier.

The market’s moving higher and it’s flowing a lot of people. Everybody’s bearish. I mean Japanese. Yeah. And first time post history is above buck. No one believes it. You see the pullback. I, but I’m looking at it and say, Hey, you got to do a nine. At least the upside. There’s a one. Sorry, continuing to go higher.

Okay. One, two. You know, if we were down here. Yeah, we continue to move higher. I had it off the chart. Okay. There was a one and two down. There was a one up to three, four. That’s it just give you an appreciation for the set up here and this one here now it’s regenerating. Yeah,

two and a three, six or seven. Nope. There’s a one up there. Now. We’re going to do some business. Hopefully make a low. This is when, what period of time? August, August of this year, I can remember this in August. There was a loan. There’s a 1, 2, 3, 4, 5, 6, 7, 8, 9. That nine is low. Was less than those.

Less than the six, less than a six. That whole set, similar to the one we had back, you know, earlier in the year and what the market did, it took off. This is when a number of the major heads, funds soul, and they got killed in this. There it goes. That’s a big one. That’s anyway,

close to new, all time highs. You’re moving up there quick. Now there’s the eighth again? Same thing market said, no, I’m not ready to top out. I’m going to give you a pullback. I’m going to stutter. And that’s what it’s doing. Price. As you pull back, now, you’re going to regenerate again. I think while you’re,

you’re moving sideways. Now, hold on. Going to do it again. Nope. 3, 4, 5, 1 for by setup, two for by set up one for a cell setup. Two for sales, have one back and forth, back and forth. There we go. 4, 5, 6, 1, 2. See it just There. 6, 7, 8. Next one. Hope we get a night. Okay.

This nine is above the six and that’s important. I watched that one at this low and they said it was going to do a nine in turn or is it going to do on the full, full countdown? And like I said, I’ll show you later how we hopefully increase the odds of distinguishing between whether a nine is going to be a lower, whether you’re going to go to fulfillment,

which is the countdown. But in this particular case, you can see that the nine was not less than the six. The six is a real key day. I told you before seven, eight or nine, six is a real key day. Like Rick said, what it told me is that you got one more day down and you got it right there,

right here, day after. And that’s you, you have to get below six. You probably would’ve put sometime of you, you, you hit sometime in this zone, you would have said either you’re at the low and now keep going. That’s when you had that strong move to the upside, it was virtually on contested. I mean, the market just took off and that’s where you caught the hedge fund guys short.

Now there’s a nine again, look at this one. Same thing. The reverse of that, where we said before the night had to be less than, than six. The nine has to be greater than a six. You want to even greater than seven and eight. So you knew you’re going to make one more thrust up here rather than greater than a high nine tie had to be greater than the six as high conversely at the low,

the nine’s low had to be less than a six law. See, over here, it wasn’t nine was not less than six. Reverse it. That would be high, greater than highest six high, nine greater niacin. And it wasn’t what happened. You made one more thrust when you went above the sixth and that’s at 1 0 4 10 or something like that. And what happened?

What did happen? Well there, this is very somewhat recent. Yeah. Now you’re moving. I love what’s happening here. You had a 1, 2, 3, 4 by setup, consecutive days for, and you didn’t want up 1, 2, 3, 4 I’m dwelling on this because unless you get this basic approach to the setup, the whole concept, you’re gonna have trouble with the countdown and you’re going to have the trouble with the enhancements.

TD Sequential Explained (video transcript)

Hi guys. And we’ll come back to a new episode today. We’re going to be looking at an indicator called the TD sequential. The TD sequential is an indicator that is used to predict a roast reversal or correction within a trend by counting candles. The first count has nine candles effet that condition. And the second count as 13, I’ll explain what this means later,

but to give you guys a quick understanding of it, think about it like this, the longer an investment goes up or down, the more likely it is to reverse. Therefore, the tea’s sequential builds off of this concept by creating a sort of a timer to let the user know when to expect a reversal. All right, there’s two parts of a T sequential.

The setup in the countdown. There’s also a set up for one to buy a set of for one the cell, the rules for the setup and countdown remained the same, regardless of whether you’re looking to buy or sell. The rules are easy to understand, but it can get tedious to mark the candles manually. I’ll start by going over the rules of how the setup works.

Feel free to skip ahead if you’re not interested in the logistics behind it. I, so first comes to set up for the setup of you’re going to always be looking for candles behind the current candle to determine if the set up can begin or continue for an example, we’re going to look at this image that I found online, and then we’ll look at some live examples for the by setup to begin.

The Kindle you’re looking at has to close below the candle that came four places behind it. And the current example of that would be can delay. As you can see here, this is a candle we’re looking at number 1, 1, 2, 3, 4, that makes a candle. A, this rule is going to continue until candle seven in the setup. So as you can see here,

candle one closed away below candle, a candle to closed way below candle B candle three closed below candle. See candle four closed below candle D candle five closed below candle one, and so on all the way up to candle seven. And then after we get to candle seven, we get to candle eight, which is basically termed in the same way, except for a few differences.

The main difference is that if the lowest shadow of candle eight is lower than or equal to the lower shadow of candle six or seven, then you can already start getting to ready to buy a candle late rather than wait for candle nine. Why? Well, because theoretically, this indicates that the current trend is losing steam. So it’s near the end of its run.

If candle nine closed lower than candle five, then the setup is complete, which is when you can start looking to seller buyer position. The same rules apply to selling setup except in the opposite directions. We’re still looking at where the candles are closing, but let me just zoom in one second. All right. All right. So we’re still looking at where the candle’s closed,

but this time they have to beak, they have to close higher than the candle looking for behind it. The eighth candle is, is where the trend is expected to start bouncing off of support or resistance. This is where the trend will face a small correction and a quick profit can be made. So you can see here candle who can align the obviously found resistance here,

which I better. We look back. Yeah. I mean, there’s a sort of a resistance right there. So it makes sense that it would stop there, but you can see the rules are still the same candle. One had the close higher than candle a, which you did candle to close higher than candle B. So on and so forth up to candle,

seven candle, seven close higher than candle three. You can see their candle late. Same rules still apply candle a closed higher than candle four. So the trend continues After the setup Comes the countdown and the countdown is very, is kind of similar during the countdown. A candle is only counted at the current candles is either lower than two candles behind it.

If you’re looking at a buying countdown or higher than two candles behind it, if you’re looking at a selling countdown, once the 13th candle is completed, again, you can expect a trend reversal and usually a bigger one than the one from the setup phase. So you can see here Right here is where The setup was buying setup. After candle nine was completed,

then the setup finished and we’re looking at the countdown phase. So you can see here, we have to look two candles behind it can, the one would be counted because the close of Barwon is lower than the lows. Two bars earlier. So close here, and you can see that it is in fact lower. So for example, here, here,

we were looking at a buying setup, but now we’re looking at, at a buying countdown. So this is going to let us know when to buy. So as you can see here, in order for it to buy the rules for the setup where that it had the Cocoran candle had the closed book below the, the previous candles and in the countdown,

it’s basically the same thing too, except that instead of you looking for candles behind you, you’re looking to, so the one close to candles below this one. So it would be below candle eight. You can see that it does fit the condition candle to close below candle nine. This one did not, but unlike the setup phase, the countdown does not have to be consecutive.

You can skip bars until the 13 count is completed. You can see here 13, I mean a candle three fits a condition. Can the four candle, five candle, six kind of seven all the way up to candle 13 after candle 13 is when the countdown ends and when you can buy. And as you can see here, the, the reversal from the countdown was a lot bigger than the reversal that happened,

or, I mean, the correction that happened after the setup phase. And then again, the rules still apply. No matter whether it’s a buying countdown or a selling countdown, you can see here, the same rules still apply. There’s a set first comes to set up a nine count and then comes to counter a 13 count. Except as again, as you can see here instead of four candles,

we’re looking only behind only two. And in this case, the candle has to close higher than the candle that came two candles behind it. So can the one closed higher than the candle. It eight candle to close higher than candle nine. These didn’t fit the conditions. So we skip them and move on to candle three all the way up until we have 13 candles.

And then you can see here that in fact, a big correction came afterwards or a reverse. So this, this probably looks more like a reversal.

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