TD sequential indicator Guideline

TD Sequential indicator MT4 is a tool invented by “Tom Demark” in order to trade in the forex market. However, it can work in commodities and CFD markets. The TD sequential indicator MT5 identifies a turning point in the price trend of an asset and alerts users, allowing them to take action. In this course, we will shed light on the TD sequential indicator for Tradingview and MetaTrader.

TD sequential indicator Guide

What is TD sequential Indicator ?

Tom Demark Sequential indicator is an extremely powerful tool, created especially to detect the end of a trend and the start of a new one (Price/Trend reversal). Made to counter some other forex tools that could be judged sometimes “inaccurate”. The Tom Demark Sequential indicator works on any time frame, but preferably on a 4 hours timeframe (optimum case). It works on any asset but traders most commonly used it for forex, commodities, and derivatives. Furthermore, it only works on either Candlesticks or bars charts. The Tom Demark Sequential indicator composes of 2 phases: The TD Set-up and the TD Countdown.

Structure and interpretation of the indicator

  • TD set-up phase

TD sequential indicator set-up phrase is a short-term phase that includes mandatorily 9 successive candles that each one’s closing price is above/below the 4th previous candle depending on the trend. At any point, if a candle closes lower/higher than the 4th previous candle, the TD setup is immediately aborting.

A Bearish TD Set-up: The candle that you’re currently looking at, must have a closing price Below the Closing price of the 4th previous candle.

Example
Bearish TD SETUP

The current trend is bearish, as the closing prices are falling.

We can observe that the closing price of:

  • The 20:00:00 candle is below the closing price of the 08:00:00 candle which creates the 1st set-up step.
  • The 00:00:00 candle is also below the closing price of the 12:00:00 candle which creates the 2nd set-up step.

A Bullish TD Set-up: The candle that you’re currently looking at, must have a closing price Above the Closing price of the 4th previous candle.

The current trend is bullish, as the closing prices are rising.

We can observe that the closing price of:

  • The 20:00:00 candle is above the closing price of the 08:00:00 candle which creates the 1st set-up step.
  • The 00:00:00 candle is also above the closing price of the 12:00:00 candle which creates the 2nd set-up step. The current trend is bullish, as the closing prices are rising.
Bullish TD SETUP Graph
  • TD countdown phase

TD sequential indicator countdown phase could be a short or a long-term phase, it starts right after the complete Setup phase. It contains 13 candles instead of 9 and it looks back at the closing of the 2nd previous candle instead of the 4th. However, in the countdown phase, the candles aren’t mandatorily 13 successive candles, in other words, we can suspend the phase without canceling the countdown.

Depending on the trend, we compare the current candle’s closing price to the previous 2nd candle’s closing price. In other words:

  • Current Candle Closing Price > 2nd Previous candle Closing Price –> uptrend
  • Current Candle Closing Price < 2nd Previous candle Closing Price –> downtrend
Countdown example

The TD Countdown phase started but interrupted many times. The phase will not be canceled, instead, it will be suspended until conditions are met.

Comparison

Download TD Sequential indicator for MT4

TD Sequential indicator MT4 assists to identify the end of a trend and the beginning of a new trend. It shows arrows on the main price chart in order to alert forex traders about the set-up phase, so they may take action, or not. In this example, there is a completed Setup phase, then the countdown phase took a little bit of time for the whole process to complete.

TD sequential indicator MT4

Download TD Sequential indicator for MT5

The TD sequential indicator for MT5 is a custom Metatrader 5 tool that you can join it in your trading chart for free. However, it alerts forex traders as soon as the finish of the setup phase. This indicator shows two phases as mentioned above. In this example, both phases were really in the short term they were successive. Then the countdown phase started forming, it took almost 4 days to complete in a 4 hours time frame.

TD sequential indicator MT5

Download TD Sequential indicator for Tradingview

TD sequential indicator Tradingview is a build-in indicator in the Tradingview charts. It is an effective tool created to identify the time accurately trend exhaustion and price reversal. As follows, a successfully completed setup phase, and will be followed by either a long-term or a short-term countdown phase, depending on the traders and the overall market.

TD sequential indicator Tradingview

Pros and Cons of Tom Demark Sequential Indicator: 

Advantages

  • TD sequential indicator is a really useful tool that can identify trends in any financial asset allowing users to make a profit.
  • It is available for the popular trading platforms including MetaTrader4 (MT4), MetaTrader5 (MT5), and Trading View.
  • Can be a substitute for many other technical indicators that which can be a little less accurate.

Disadvantages

  • It is a hard-to-understand tool, especially for beginners.
  • Can manipulate the results by false trades, thus the set-up period can endlessly be aborted.
  • Works for all time frames, yet could only be accurate only under a 4 hours time frame analysis.

Conclusion

The TD Sequential indicator is a very efficient tool used by a lot of traders. Tom Demark constructs this indicator through 2 phases: the setup phase, and the countdown phase. Each phase has some different characteristics from the other, but they are ultimately complementary to each other. The Setup phase is a short-term phase compared to the countdown phase which could be a short-term or a long-term phase. The Countdown phase starts forming directly after a completed and validated setup phase.

Key takeaways

  • The setup phase allows users to detect whether they should enter or exit the market.
  • In other words, if the setup phase is bullish, the trader should exit the market because there will be a potential reversal trend nearby which means a downtrend.
  • On the Other hand, if the setup phase is bearish, the trader should enter the market because there will be a potential reversal trend nearby which means an uptrend.
  • However, the Setup phase could take a lot of time to complete because it is very sensitive to any market manipulation or asset volatility thus it can get abortion endless times.
Summary