Traders use graphical analysis by different ways. Someone trying use the basic constructions, others are deeply studied this theme. Thomas Demark Lines Strategy is a separate approach using levels and one indicator.
Currency pairs: Any pairs
Timeframe: H1 and higher
Recommended brokers:, ,
You can download the Thomas Demark Lines strategy at the end of the article.
Preview of the indicator:
To calculate the levels, indicator use the reference points. This local minimal and maximal prices on the chart.
Settings of the Thomas Demark Lines strategy
- Select the comfortable timeframe from H1 and higher.
- Select any currency pair.
- Set DeMark-Lines indicator and restart the terminal.
Trading rules with Thomas Demark Lines Strategy
The lines are built to the highest or lowest point. Pay attention to the rules of detection of the lines.
- If the current trend is downward, then we look for the line of the highest (Red) indicator points.
- If the trend is upward – look for the lowest (Blue) dots.
You can also manually build a trend line by the same rules:
Thus, the basic rules of the strategy:
1. Deals always opened against the trend, which was during the construction of the lines. The basic idea of using lines – just find the point of breakdown.
2. The signal appears when the level is broken. The deal opens in the direction of the breakout.
3. Enter the market only after candle is closes. You can do this before, but then there is a risk that the price will return to the previous level, and the crossing will be canceled.
At the screenshot – ideal scenario. But false breakouts in this strategy happens a lot. To minimize the negative situation, follow these rules:
1. Always check the economic news. Do not open the deals before the important news.
2. Use the Stop-Loss.
3. Use Take Profit. It can be made fixed (a certain number of pips). You can also find historical levels and set the Take Profit at the nearest.
4. Draw a new line for the beginning of a new trend. If it is broken – it is a signal to close the deal.
5. Do not open deals, when the trend is not clear.
Summary: Remember that Thomas Demark Lines strategy is not ideal, because it is based on just one indicator. Therefore, it is optimally supplemented 1-2 indicators more (on the trader’s discretion). Then strategy will be able to show excellent results.