The Magic Buy And Sell Indicator

Helping traders on the markets by use this indicator which could potentially identify tops and bottoms in order to help to decide when to buy or sell.

Credit for YT video: The VIX Guy

As we all know, the market doesn't go up in a straight line, there are always ups and downs no matter what you invest. But have you wondered if there is any way that can allow us to predict when exactly the market will go up or go down? No matter if you are a short term trader or long term investor, wouldn't it be great if we can have a magical indicator that can show us exactly when to sell the tops and when to buy the dip? Actually there is one such indicator can do exactly that. In fact, this indicator was used to be exclusively adopted by the legendary traders like Steve Cohen and Paul Tudor Jones.

In this video, I will help you guys understand how exactly this indicator works, how to use it in your own trading and investing. And also, at the end of the video, I will show you guys how you can add this indicator into your charting platform like TradingView for absolutely free. So please make sure you watch this video till the end and do not miss out on anything. I promise you I will make it quick and don't waste your time. Alright, let's get started.

Before I show you the name of this indicator, let me first show you how powerful this indicator is. Let's pick a random stock, for example Square, one of the hottest stocks recently. When we apply this indicator to the chart, we can clearly see when exactly the short term market tops are. In technical analysis, we call such short term tops the Swing Highs. This indicator shows us where exactly the potential Swing Highs are. These are the places where the stock price is overheated and we should stay away from this stock. Also, other than the Swing Highs, this indicator can show us where the Swing Lows are. We often heard people say, "Buy the Dips." These Swing Lows are the best potential dips where you can enter your trades, or add more shares to your existing positions. Let's take a look at another example. Here is the daily chart of Apple. Same thing, once we add this indicator, we can instantly see where are tops that we should stay away from, and where are the dips for us to buy more shares at the best price. Not only does this indicator work on individual stocks, it works on broad indexes as well. In fact, this indicator actually successfully predicted the massive stock market crash back in March 2020, exactly three days before the crash. Also, it precisely showed us where the market bottom was. So if you had this indicator back in 2020, you would successfully get out of the market three days before the crash, and you would know exactly when to start buying the dip, while everyone else was panicking.

Alright, so what exactly is this magical indicator? This Indicator is called DeMark 9, named after its original creator Tom DeMark. Tom DeMark used to work for Paul Tudor Jones as a portfolio manager and vice president for Tudor Capital, and now he is serving as Steve Cohen's personal special advisor for his hedge fund Point 72. Tom DeMark has created quite a lot of different technical indicators, but this indicator called DeMark 9 is by far the most effective one on predicting the short term market tops and bottoms, and also the easiest one for beginners to understand. So what is the secret of this DeMark 9 indicator? And how exactly does it work? In technical analysis, we often say, "Simple things work the best." The secret behind DeMark 9 is actually pretty simple. In general, there are only two major categories of technical indicators. First category is called the Momentum Indicators, which help us to identify trends, breakouts and the trend reversals. The other category is called Oscillator indicators, which help us to identify overbought and oversold conditions in the market. And DeMark 9 belongs to the second category, which means, essentially DeMark 9 is a leading Oscillator Indicator that shows investors where the market is heavily overbought or oversold.

This is how DeMark 9 works. It compares the current candlestick's closing price to the closing price of the candlestick four days ago. If the current closing price is higher than four days ago, it will be considered Bullish and it will be marked with a green number. On the other hand, if the current closing price is lower than four days ago, it will be considered Bearish, and it will be assigned with a red number. The number shows how many days in a row that this market has closed above or below the price four days ago. And the most important number we are looking for is number nine. For example, this is the daily chart of Apple stock. If we add the original DeMark 9 indicator, you will see something like this. We can see that there are two number 9s showing up in this chart. One is Bearish, and the other one is Bullish. On the Bearish side, this number nine indicates there have been nine days in a row that the daily closing price was lower than its four days ago. And this is a very significant short term oversold signal. Whenever this bearish number nine shows up, it usually means the market has potentially bottomed in the short term. So this is usually a very good time to add more positions if the stock is on a clear uptrend. On the Bullish side, this green color number nine indicates there have been nine days in a row that the daily closing price was higher than its four days ago. And this is an important short term overbought signal. Whenever this Bullish number nine shows up in a chart, that usually indicates this stock is short term overheated, and we should expect a pullback coming soon. Typically you should avoid buying or adding more positions when this overbought number nine shows up, especially if the stock is in a clear downtrend. So that is pretty much how the DeMark 9 Indicator works. The mathematical calculation behind this indicator is extremely easy to understand, but also is extremely, extremely useful and effective.

Before we move on, there is one thing I do wanna highlight here is that, whenever you use a DeMark 9 to make a buy or sell decision, you have to analyze the current trend of the market you are trading first. If the stock you are watching is in a clear uptrend, then you only use DeMark 9 Indicator to look for Buy signals. If the stock is in a clear downtrend, then you use DeMark 9 to look for sell signals. Never ever bet against the trend, especially if you're a beginner. If you are completely new to technical analysis, or financial marketing in general, and have no idea what I am talking about, no worries at all, I have uploaded my entire Trading Course for Beginners for free on this channel. It covers pretty much everything you need to know about technical analysis. Do check it out if you haven't. I will put the link in the comment section below. Alright, before we go, I will quickly show you guys how to implement this DeMark 9 Indicator in your charting platform for absolutely free. First, the most important thing is the source code. These are the codes I am currently using. There are a couple of very minor changes compared to the original one. For example, I don't wanna make my chart look too cluttered with all those DeMark numbers, so I remove all the numbers from one to six, and only show numbers seven and eight. And for number nine, which is the most important number that we are looking for, I changed it to an emoji icon so that it's easier to visualize in the chart, especially if you zoom out. I can definitely share with you guys all these source codes for free. All you need to do is to add me on Twitter, send me a DM and I will send you all these codes on Twitter so that you can just copy and paste. Here is my Twitter account, I will also leave my Twitter link bellow this video on YouTube.

Cool, next, once you have the source code of this indicator, you need to add them to your charting platform. The charting platform I am currently using is TradingView, which in my opinion, is the best charting platform out there in the market. So I will show you guys how you can add this DeMark 9 indicator to your chart on TradingView with my source code. Once you are on your TradingView, click the Pine Editor at the bottom. In the Pine Editor, you can copy and paste the source codes and then click Save. Once you save it, click Add to Chart. Then, boom! You are all set. You should be able to see the DeMark 9 Indicator on your chart right away. All right, just one last thing before we go, no matter how powerful an indicator is, nothing is guaranteed in the financial market. So please always remember this: investing and trading is a game of probability, not certainty. An indicator's ultimate job is to increase our probability of winning, but still, it is eventually our job to decide how much risk we are willing to take for the potential rewards. Always make sure you understand your downside risk, respect the risk, and protect your downside, and your upside profits will take care of themselves, especially if you have such a powerful indicator like DeMark 9. All right, that would be the end of this video. If you are new to this channel, my name is Vic. I make videos every week to share some of my thoughts on what's going on in financial markets. And I also share some educational contents to help your investing journey, just like this one. If you are interested in the world of finance and business and find my videos being valuable to you, please consider subscribing.