DeMarker

Demarker Technical Indicator

The Demarker Technical Indicator compares the maximum value of the current period with the maximum value of the previous period. If the current maximum is higher, the difference between the two is recorded. If the current maximum is lower or equal to the previous maximum, a value of zero is recorded. The differences for a certain number of periods are then added up. This sum is used as the numerator of the DeMarker and is divided by the sum of the differences between the minimum prices of the previous and current periods. If the current minimum price is higher than the previous period, a value of zero is recorded.

Signal Lines

When the indicator falls below 30, it suggests a bullish price reversal. Conversely, when the indicator rises above 70, it indicates a bearish price reversal.

Long-Term vs Short-Term

Using longer periods when calculating the indicator allows you to capture the long-term market trend. On the other hand, using shorter periods helps you enter the market with less risk and align your transactions with the major trend.

In MetaTrader the DeMarker runs from 0 to 1, with the levels 0.3 and 0.7.

Calculation of DeMarker

DeMax(i) = MAX(HIGH(i) - HIGH(i - 1), 0)
DeMin(i) = MAX(LOW(i - 1) - LOW(i), 0)
DeM = SMA(DeMax, N) / (SMA(DeMax, N) + SMA(DeMin, N))

Where:

HIGH(i) and LOW(i) are the high and low of the current bar;
HIGH(i - 1) and LOW(i - 1) are the high and low of the previous bar;
N is the indicator period.

In MetaTrader the DeMarker ranges between 0 and 1, so the levels 30 and 70 correspond to the values 0.3 and 0.7 in your trading signals.