Demarker Forex Indicators
The Demarker indicator
is named after Tom Demarker who claims to have developed this indicator to overcome
the shortcomings of other overbought/oversold oscillators. There are different
versions of it in the market; in some
cases the indicator uses 0 and 1 as the maximum and minimum of oscillation,
while in others the typical 0-100 range is preferred.
Any level between 3 and
7 (or 30 and 70 if bigger numbers are preferred) is regarded as a neutral level
characterizing a continuation phase. If the price is in an uptrend, and the
indicator value is also rising, the trend is expected to go on. If we observe
an uptrend, while the indicator value is falling, we're faced with a
divergence, implying that the uptrend is slowly losing momentum and may suffer
an abrupt reversal. Similarly, when the price is in a downtrend, but the
indicator's value is rising, we suspect that the downtrends is weak. The
oscillator and price action are converging, implying an ultimate reversal. If
both the indicator and the price are in an uptrend, the interpretation is that
the existing price pattern will continue to develop.
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