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What is a Demarker Indicator
Demarker Indicator or call it DeM, is a technical analysis tool that helps traders to identify potential buying and selling opportunities based on the price movement of an asset. This indicator was developed by one of the most popular technical analysts Thomas DeMark. A Demarker indicator is a type of trading oscillator that fluctuates between 0 and 1. Using this indicator you can determine when to enter the market i.e. buy or sell via which you can capitalize on probable eminent price trends. This indicator was designed to be a leading indicator as it attempts to signal an eminent change in price trends. The core principle behind this indicator is to capture the demand for an underlying asset by comparing the high and low prices within a specified period.
How to Calculate Demarker Indicator
To calculate the Demarker indicator you need to select a predefined period commonly 14. For each period, DeM compares the current high with the previous high and the current low with the previous low.
DeMax = Current high – Previous high
DeMin = Previous low – Current low
The Demarker value is then calculated by dividing the sum of all the DeMax values by the sum of all DeMax and DeMin values over a given period.
How to use the Demarkar indicator
There are multiple ways of using the Demarker Indicator on the Pocket Option. However, the most common ones are.
1> Solo: You can use a solo Demarker Indicator on the Pocket Option. While using the Demarker Indicator you can identify the possible price movements using a single moving average line. When the moving average line is below line 30 it signals an upcoming bullish trend similarly, when the the moving average line is above line 30 it signals an upcoming bearish trend.
2> Dual Indicator Combination: You can even use a Demarker Indicator with other trend combinators like RSI and more on the Pocket Option platform. While using the combinator you can expect a bullish trend when both the RSI and Demarker Indicator are at an oversold level and similarly, you can expect a bearish trend when both the RSI and Demarker Indicator are at an overbought level.
