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Strategies & Market Trends : Set the Controls For The Heart of the SUN
IQ 2.050-1.4%Jan 9 9:30 AM EST
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To: Doug R who wrote (535)7/15/1997 1:29:00 PM
From: Mr.Creosote   of 1156
 
Thanks Doug, I assume that the range of the setup is equal to the highest high minus the lowest low of the setup. If the new setup however is in the opposite direction then does the countdown begin again regardless of the range condition? At this point I have assumed it does and the intersection and countdown phase recycles.

The way I implemented the "intersection" rule is precisely the way he describes it in his book. That is for a BUY setup and beginning with day 8 you want the high of day n (n=8,9,10,11, ...) to intersect the lowest low of all days inbetween day 1 of the setup and day n-3. The Intersection means equal to or greater. Intersection has occurred the first time the above condition is met and countdown can begin on that same day. I can't find anything relating intersection and closing prices (unless he has changed the rule since the publication of his first book).

Personally I think the sequential makes sense in trying to identify low-risk trading opportunities and for that DeMark should be given the metal of honor for conceiving such a complex tool. But as with many of the complex trading schemes there are holes that need to be plugged in and the way to do it is with the relatively large number of qualifiers. This is why it is difficult to code this pattern and DeMark could easily write another book dedicated solely on this pattern. For example, I consider the recycling rule and inactive setups difficult to connect to the physics of the trading situation at hand.

Comments?

JS
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