Tom Demark Trend Following System

Tom Demark Trend Following System is a forex trading system which is completely based on trend following concept. The Tom Demark Trend Following System is a very simple forex trading system yet it is very powerful and generated above average results when back tested in past data. This trend following forex trading system is very dynamic. It can be used to trade multiple time frames and it can be used to trade almost every financial instrument available on metatrader platform. Traders should be very precise on defining the trend of the market. The point I am trying to clarify here is- you should never be trading against the prevailing trend of the market. Market should be trending in your favor at least on the timeframe you are watching.

Tom Demark Trend Following System Overview

 When you get your Tom Demark Trend Following System in your trading software, your chart will look like this:

Tom Demark Trend Following System Indicators

 A brief introduction to the indicators used in Tom Demark Trend Following System

• Moving Averages

There are two moving averages used in this forex trading system. The golden color moving average uses 9- period moving average while the red moving average uses 30 bars to calculate its value.

• Momentum

Momentum Indicator tells you if the bullish momentum is strong or the bearish. When this indicator is rising, it indicates increasing bullish momentum and when this indicator is falling it indicates increasing selling pressure in the market.

Tom Demark Trend Following System: Buy Parameters 

• Market should be up trending.
• Market should be bouncing from the recent support region.
• Exchange rate should be above the both moving averages.
• Momentum indicator should be trending higher.
• Place your buy trade as soon as above conditions are met.
• Set your stop loss just below the recent swing low.
• Book your profits when the exchange rate falls below both of the moving averages.

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Tom Demark Trend Following System: Sell Parameters 

• Market should be down trending.
• Market should be falling from the recent resistance region.
• Exchange rate should be below the both moving averages.
• Momentum indicator should be trending lower.
• Place your sell trade as soon as above conditions are met.
• Set your stop loss just above the recent swing high.
• Book your profits when the exchange rate rises above both of the moving averages.