Trading cryptocurrency market using Demarker indicator

Trading cryptocurrency market using Demarker indicator

By quintomudigo | Teacher forex school | 21 Nov 2019


Demarket is an oscillator indicator.

As an oscillator indicator,Demarker indicator was created by Thomas Demark with the main objective of measuring the underlying asset thus enabling traders to know whether the market is in an overbought or oversold condition.Demarker therefore has two components ,that is;

 

Demax which compares the current(bar) high to the previous (bar) high

Demin which compares the current(bar) low to the previous (bar) low

 According to Thomas Demark,the value of the intervals (i) of the two components above is therefore calculated using the following formula;

for Demax we have;

 if High (i)>High(i-1) then we have the following;

 

Demax(i) = High(i)- High(i-1)

 

if otherwise then we have

 

Demax(i)=0

 

for Demin we have;

if low(i)<low(i-1) then we have the following formula;

Demin(i)= low(i-1) - low(i)

if otherwise then we have;

Demin(i)=0

 

 

1.  Oversold cryptocurrency Demarker indicator  

Demarker indicator has its intervals oscillation at between 0.3 to 0.7.When the demarker curve is between 0.3 to 0.7,then the cryptocurrency trader is not at any risk while in the market.At that range,the cryptocurrency trader can continue hold the cryptocurrency which he had previously purchased.If the demarker curve falls below 0.3,that is an indicator that the market has become oversold thus the trader should purchase a certain amount of a given cryptocurrency since the market of that given cryptocurrency will start moving in an upward direction. The cryptocurrency trader can either place a buy market order which will instantly be executed or they can place a buy limit order which will be executed when the price reaches their limit price. This is indicated as from the candlesticks chart below;

 

351665157-1c4beb19c9b6daee1f6b3df011a6570c3593ce8de1f0ef6a0bdbb0bd5eecd1ea.png

   

The above chart is a market for TRX in terms of USDT. Two points are being indicated,point A and point B. Point A represents the Demarker curve while point B is the point below 0.3 thus an oversold point. At point B where Demarker has fallen below 0.3,there is an oversold market for the TRX market in terms of USDT. The cryptocurrency trader should place a buy order of a given amount of TRX using a given amount of USDT available in their trading account.The cryptocurrency trader can either place a market buy order which will instantly be executed or they can place a limit buy order which will be executed when the market reaches their limit buy order. The cryptocurrency trader should use risk management while placing their buy order. The cryptocurrency trader will receive the amount of TRX purchased to their holding account. When the price of TRX has started to rise,the account of the trader will start increasing in value.

  2.Overbought cryptocurrency Demarker indicator  

Demarker indicator has its intervals oscillation at between 0.3 to 0.7.

When the demarker curve is between 0.3 to 0.7,then the cryptocurrency trader is not at any risk while in the market.At that range,the cryptocurrency trader can continue hold the cryptocurrency which he had previously purchased.If the demarker curve rises above 0.7,that is an indicator that the market has become overbought thus the trader should sell a certain amount of a given cryptocurrency which he had previously purchased and is currently holding since the market of that given cryptocurrency will start moving in a downward direction. The cryptocurrency trader can either place a sell market order which will instantly be executed or they can place a sell limit order which will be executed when the price reaches their limit price. This is indicated as from the candlesticks chart below;

 

351665157-91cfbf289a77189d107826a276994f5fbe62fa8dffdf43d114746f3e83d78ce9.png

   

The above chart is a market for TRX in terms of USDT. Two points are being indicated,point A and point B. Point A represents the Demarker curve while point B is the point above 0.7 thus an overbought point. At point B where Demarker has risen above 0.7,there is an overbought market for the TRX market in terms of USDT. The cryptocurrency trader should place a sell order of a given amount of TRX  which he had previously purchased and is currently holding to avoid making their account to start decreasing in value.The cryptocurrency trader can either place a market sell order which will instantly be executed or they can place a limit sell order which will be executed when the market reaches their limit sell order. The cryptocurrency trader will receive the amount of USD increased in amount as compared when they purchased the TRX . 

 

 Recommendation: Cryptocurrency market is highly volatile. When you place a buy order, make sure to apply risk management to be safer incase your buy order goes against you.      

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quintomudigo
quintomudigo

Trader, Blockchain Technologist and Contentpreneur. Also founder and CEO @ Teacher Forex School.


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