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DeMarker MA is a trading algorithm based on two standard Forex indicators: the DeMarker and two moving averages of different periods. This trading algorithm provides for trading during a certain market trend, that is, indicators, interacting with each other, determine the current market movement, depending on which and the direction of the trade is determined. Indicators in the strategy work on confirming each other's signals, while the main indicator in the strategy is the DeMarker indicator, and two exponential moving averages serve to filter the signals of the first one, which makes the strategy more accurate and efficient.
The DeMarker MA strategy is multi-currency, that is, it can be used to trade any currency pairs, the timeframe can also be any.
Strategy indicators
The DeMarker MA strategy includes only two indicators, which are included in the standard forex set, time-tested. This not only significantly improves the effectiveness of the strategy, but also simplifies its use.
- DeMarker - indicator of technical analysis of the market with a period of 14 and signal levels of 0.3 and 0.7, that is, its settings remain set by default.
- EMA - fast exponential moving average with a period of 14.
- EMA - slow exponential moving average with a period of 300.
Trading with the DeMarker MA strategy
Using the DeMarker MA strategy does not take much effort, since it includes very simple, but at the same time effective indicators. To open a certain trade using the strategy, it is first needed to find the intersection of the DeMarker line of one of the signal levels, then find the intersection of the moving averages and determine which of them above, and then determine the position of the candle relative to the fast moving one. And on the candle, on which all the necessary conditions match, a trade can be opened in the direction with the current trend. If the trend is up, a buy trade, if it is down, a sell trade.
Conditions for Buy trades:
- The DeMarker indicator crosses its 0.3 level and moves up.
- Moving averages intersect so that the fast one is higher than the slow one.
- The current candle must be higher than the fast moving average.
Upon receipt of a combination of conditions on a signal bullish candle, a buy trade may be opened, due to the presence of an uptrend in the market. Stop loss should be set at the point of a recent local extremum, or slightly below the slow moving average. The trade should be closed after DeMarker rises above the level of 0.7, since most likely at this moment the line will change direction, which will indicate a change in the current trend and will allow considering opening new positions.
Conditions for Sell trades:
- The DeMarker indicator line should move down after crossing the 0.7 level.
- Moving averages cross and EMA (300) above EMA (14).
- Signal candle closes below EMA (14).
A sell trade can be opened immediately upon receipt of such a combination of conditions that characterize a downtrend in the market. Stop loss should be set at the point of the recent local maximum or above the slow moving average. It is recommended to close such a trade upon receiving a return signal from the DeMarker indicator, which will characterize a change in the current trend, which will allow considering the opening new trades.
Conclusion
The DeMarker MA strategy is very effective, as it is based on very accurate time-tested indicators. In addition, it is easy to use and therefore perfect even for beginners. To obtain the necessary trading skills and the correct application of the strategy, preliminary practice on a demo account and the study of the indicators included in it is necessary.
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