Demarker Indicator in Forex
A clear definition of Demarker Indicator, with practical context for reading markets and making better trading decisions.
Definition
The DeMarker Indicator is a momentum oscillator developed by Tom DeMark. It compares recent highs and lows with those of the previous period to estimate buying and selling pressure.
Typical Scale
A common version ranges from 0 to 1. Readings above roughly 0.7 are often described as overbought and readings below roughly 0.3 as oversold. These are reference zones, not automatic reversal signals.
How to Use It
DeMarker can help identify stretched momentum, momentum shifts, and possible divergence. As with other oscillators, it can remain extreme during a strong trend, so chart structure should decide whether a reversal interpretation is justified.
Key Takeaway
DeMarker measures relative buying and selling pressure. Extreme values describe momentum conditions, not guaranteed turning points.
Practical forex example
Why Demarker Indicator matters
Understanding Demarker Indicator helps traders interpret market information, plan decisions, and manage risk with more context.
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