TD Sequential
It was designed by Thomas R. Demark in the 1970s and started to be used in the 1990s. Afterwards, the TD Sequential indicator, which was coded inspired by Jason Perl's books, has become one of the technical analysis algorithms frequently preferred by investors today. This indicator guides traders in determining trend direction, support and resistance levels, and stop loss points. Its general logic is established by counting candlesticks in price movements based on candle closings. Therefore, it is very sensitive to price movements. It tries to detect trend reversals at peaks and troughs as much as possible. Unlike other technical analysis algorithms, a green sell signal is considered a red buy signal. Coinlegs software developed this signal with the help of "TD Sequential by KIVANC fr3762" indicator in Tradingview system.
The dotted lines above and below the price action indicate possible support and resistance levels. It consists of two main components, TD SETUP(setup) and TD COUNTDOWN(count).
TD SETUP
In the TD SETUP section, it is aimed to determine the trend reversals. It consists of green and red counts. Green counts represent sell setup, red counts represent buy setup. For this setup, consecutive candles are counted from 1 to 9. There are two separate setups for buy and sell signals. Counting is made each time according to whether the closing price of the last candle is greater or less than the closing price of 4 candles before. If it is high, the green counts from 1 to 9, and if it is low, the count starts from 1 to 9 in red. The price starts counting again with 1 at the candle where the reversal started.
TD BUY SETUP
TD BUY SETUP is the formation of a downtrend with a reversal in the price action that initiates the buy setup. Purpose of buy setup; In a falling trend, it is expected that the price movement starts from 1 and continues to decrease until 9, and after 9 is seen, the price changes direction and starts to rise. In 9 consecutive candles, the buy setup is complete if the last closing price is 4 candles lower than the previous closing price. If the last closing price is equal to the previous closing price of 4 candles, the count does not start and the number is not specified. If the count is interrupted before it reaches 9, a re-install occurs.
TD SELL SETUP
TD SELL SETUP is the formation of an uptrend with a reversal in price action that initiates a sell setup. Purpose of sell setup; In an ascending trend, it is expected that the price movement starts from 1 and continues to rise up to 9, and after 9 is seen, the price changes direction and decreases. In 9 consecutive candles, if the last closing price is 4 candles higher than the previous closing price, the sell setup is complete. If the last closing price is equal to the previous closing price of 4 candles, the count does not start and the number is not specified. If the count is interrupted before it reaches 9, a re-install occurs.
During the setup phase, the red M9 buy signal is evaluated as the green M9 sell signal. The buy signal, the red M9, is interpreted as a stronger signal if it is close to the support, and the sell signal, the green M9, as a stronger signal if it is close to the resistance. Signals that break support and resistance levels are considered weak signals.
TD COUNTDOWN
TD COUNTDOWN, that is, counting, is a count that starts from 1 to 13 and is not required to be sequential, unlike the setup phase, that can start after a completed installation. Counting is made each time, according to whether the closing price of the last candle is greater or less than the closing price of 2 candles before. It includes two separate counts for buying and selling.
TD BUY COUNTDOWN
TD BUY COUNTDOWN takes place within an existing trend. Occurs after a completed buy setup. Its purpose is to identify the levels where the trend weakens and find the point where it returns. It is expected that the prices moving in the downward direction will continue to decrease from 1 to 13 and after 13 is seen, the trend will weaken and change direction, that is, it will start to rise. The count is complete if the close of the 13th candle is equal to or lower than the previous low of 2 candles and the low of the 13th candle is equal to or lower than the close of the 8th candle. If the close of the 13th candle is equal to or lower than the previous low of 2 candles and the lowest of the 13th candle is greater than the close of the 8th candle, the counting is delayed and continues with the + sign.
TD SELL COUNTDOWN
TD SELL COUNTDOWN occurs within an existing trend, such as a buy count. Occurs after a completed sell setup. Its purpose is to identify the levels where the trend weakens and find the point where it returns. It is expected that the prices moving in the upward direction will continue to rise from 1 to 13 and after 13 is seen, the trend will weaken and change direction, that is, it will go down. If the close of the 13th candle is greater than or equal to the previous high of 2 candles and the high of the 13th candle is equal to or greater than the close of the 8th candle, the count is complete. If the close of the 13th candle is greater than or equal to the previous high of 2 candles and the high of the 13th candle is less than the close of the 8th candle, the count is delayed and continues with the + sign.
During the counting phase, the red M13 buy signal is evaluated as the green M13 sell signal. In order to reduce the risk, a position can be taken in line with a few candle movements after the signal. The 1st candle of the count that will occur after the signal is guiding us in this regard.
TD STOP-LOSS
In order to determine the stop loss point in a completed buy setup, it is found by subtracting the length of the candle formed at the bottom from the lowest price in the count from 1 to 9.
In order to determine the stop loss point in a completed sell setup, the highest price in the count from 1 to 9 is found by adding the length of the candle formed at the top.
Many traders find 9-13-9 buy and sell signals safer for TD Sequential. For a buy signal, a buy set of 9 must be completed first, followed by a buy count of 13, and finally a buy set of 9 must be completed. While this buy signal is forming, a completed sell setup should not be inserted. After the last buy setup, there should be a trend reversal and the 1st candle of the count that will occur should be seen as green. Investors consider this a strong buy signal.
For a sell signal, a sell set of 9 must be completed first, then a sell count of 13 must be completed, and finally another sell set of 9 must be completed. A completed buy setup should not be inserted during this sell signal. After the last sell setup, there should be a trend reversal and the 1st candle of the count that will occur should be seen as red. Investors consider this a strong sell signal.
Last updated
Was this helpful?