61# Momentum and Demark Trend line Trading System
Trendline Forex Strategies
Submit by Joy22 21/12/2011
It is easy, simple but awesome in power. It works with all pairs (major and others) which means you have an entry most of the time. I thought of calling it “The honey moon strategy”, but honey moon must end sooner or later. The magic of this strategy never fades. Originally called “The broken trend”, which sounds too technical. Now let us get to business and revel in the system:
1- EMA 9, EMA 30, Momentum indicator (draw a horizontal line at the 100 point).
2- The hourly chart.
3- Draw a Tom Demark trend line (connecting at least 3 swing high (or low). And should avoid steep angles
Enter buy when the 9 EMA crosses up the 30 EMA and the momentum line is above 100. And
price breaks the down trend line. (The trend line is our invaluable filter so make sure you do a
lot of practice with it). Entry should be placed at the opening of the new hourly candle after the
cross (to make sure the crossing and trend break are real and to keep away from whipsaw).
Enter sell when the 9 EMA crosses down the 30 EMA and the momentum line is below 100. And
price breaks the trend line, at the new hourly candle after the EMA crossing.
The EMA crossing can occur before or after the trend line break.
Stop: 40 pips (it has to be respected).
Target: from 40 pips up to 150 pips (depending on pair volatility and current situation).
Move your stop in the direction of trade in steps of 10 pips. When market reaches 75% of its
daily range tighten your stop. When you see signs of reversal close order at market price.
When you do not see any signs of reversal get rid of your limit and follow the price very closely with your trailing stop.
Demistifying Tom DeMark Trend Lines
My simple interpretation of what the article says regarding TD Lines (Tom DeMark Lines) is as follows:
To draw TD Lines one first must identify TD Points (Tom DeMark Points). In all cases, the bar to
the right of the TD Point being tested must be complete.
A TD Low Point (Tom DeMark Low Point) is a low bar which has a bar with a higher low
immediately before and after it. Therefore, when the bar before and/or after the low bar you
are testing (to see if it qualifies as a TD Low Point) has the same low(double or triple bottom),
the point does not qualify as a TD Low Point.
A TD High Point (Tom DeMark High Point) is a high bar which has a bar with a lower high
immediately before and after it.
Therefore, when the bar before and/or after the high bar you are testing (to see if it qualifies as
a TD High Point) has the same high (double or triple top), the point does not qualify as a TD
To draw the current lower TD Line (called the TD Demand Line), connect the the next most
recent TD Low Point that is lower than most recent TD Low Point, to the most recent TD Low
Point, then extend the line to the right.
The lower TD Line must slope upward. To draw the current upper TD Line (called the TD Supply
Line), connect the next most recent TD High Point that is higher than most recent TD High
Point, to the most recent TD High Point, then extend it to the right. The upper TD Line must
Momentum and Demark trendline