TD sequential indicator Guide for MT4/MT5
Tom Demark Sequential Indicator FAQ
What is a TD sequential?
TD Sequential is an extremely powerful forex indicator, created especially to detect the end of a trend and the start of a new one (Price/Trend reversal). It was 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-hour 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 is composed of 2 phases: The TD Set-up and the TD Countdown.
How do you read it?
The TD Sequential indicator reading is composed of two phases: The Set-up phase and The Countdown phase.TD Set-up phase
Sure, here is the text with grammar issues fixed: The TD Sequential indicator set-up phase is a short-term phase that comprises mandatorily 9 successive candles, where the closing price of each candle is below/above 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 aborted. A Bearish TD Set-up: The candle that you are currently looking at must have a closing price below the closing price of the 4th previous candle.
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 setup step.
- The 00:00:00 candle is also below the closing price of the 12:00:00 candle, which creates the 2nd setup step.
A Bullish TD Set-up: The candle that you are 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.
TD countdown phase
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The TD Sequential indicator countdown phase can be a short-term or a long-term phase. It starts immediately after the completion of the Setup phase. It comprises 13 candles instead of 9 and compares the current candle’s closing price to the closing price of the 2nd previous candle instead of the 4th. However, in the countdown phase, the candles are not necessarily 13 successive candles. In other words, the phase can be temporarily suspended 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:
Download TD Sequential indicator for MT4
The TD Sequential indicator for MT4 helps identify the end of a trend and the beginning of a new one. It displays arrows on the main price chart to alert forex traders about the setup phase, allowing them to take action or refrain from doing so. In this example, the setup phase has been completed. Subsequently, the countdown phase took some time to complete the entire process. You can download the TD Sequential Indicator for Metatrader 4 through the Finansya APP.
Download TD Sequential indicator for MT5
Pros and Cons of this indicator
Pros
- 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 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.
Cons
- 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 versatile tool widely used among forex and stock traders. Developed by Tom Demark, this indicator comprises two distinct phases: the setup phase and the countdown phase. Each phase possesses unique characteristics, but they work in tandem to provide valuable insights into market trends. The setup phase is a short-term phase, typically lasting around nine candles. During this phase, the indicator assesses the overall trend direction by comparing the closing prices of individual candles. Once the setup phase is complete and validated, the countdown phase commences. The countdown phase can be either short-term or long-term, depending on the market conditions. It typically consists of 13 candles and involves comparing the closing prices of the current candle to the closing prices of specific previous candles. This comparison helps identify potential turning points in the trend.
Key takeaways
- The setup phase enables users to determine whether to enter or exit the market.
- In other words, if the setup phase indicates a bullish trend, the trader should exit the market in anticipation of an imminent trend reversal, signaling a potential downtrend.
- Conversely, if the setup phase indicates a bearish trend, the trader should enter the market, anticipating an impending trend reversal, signaling a potential uptrend.
- However, the setup phase can be time-consuming to complete due to its sensitivity to market manipulation or asset volatility, making it susceptible to endless interruptions.