Demarker is named after Tom who is the founder of the Demarker Indicator. The main purpose of the Indicator in Forex is to identify emerging buy/sell opportunities. Its main purpose of the use is to give possible signals for buying and/or selling emerging prices of a specific currency pair in the market.
It identifies the price depletion phases, which will always correspond with the price highs and lows.
Not only does the Demarker identify emerging buy/sell opportunities and demonstrating the price depletion, but it also stands as proof to be very efficient identifying tend break-downs.
There’s a lot more that one can do with Demarker Indicator, for instance – It can be used to easily spot intra-day entry and exit points.
Looking deeper at its use, the Demarker fluctuates between 0 and 1 range.
0.7 and higher (Indicates lower volatility and a possible price drop)
below 0.3 (indicates a possible price increase)
Demarker Indicator Calculations
Demarker Indicator = (SUM of all price increment values of a specific “i” period) / price minima.
Below is how The DeMax(i) is calculated:
If high(i) > high(i-1) , then DeMax(i) = high(i)-high(i-1), otherwise DeMax(i) = 0
Below is how The DeMin(i) is calculated:
If low(i) < low(i-1), then DeMin(i) = low(i-1)-low(i), otherwise DeMin(i) = 0
The value of the DeMarker is calculated as:
DMark(i) = SMA(DeMax, N)/(SMA(DeMax, N)+SMA(DeMin, N))