Advisor DeMarker. Demark's reference points
A notable feature of a trend is its obviousness in historical interpretation, while in real time, an understandable, targeted area of the market suddenly becomes something unpredictable and difficult to predict.
The most interesting thing is that the simplest tool in the hands of a trader, the trend line, allows you to effectively determine the trend, as well as respond in a timely manner to its changes.
However, there are a number of problems with the same trend lines, because to this day most people do not know exactly how to build them, what prices to take as a basis, closing prices or minimums and maximums?
Incorrect construction leads to premature opening of trades and incorrect identification of trend changes, which entails very serious consequences.
The works of the famous trader Thomas DeMark, who introduced the concept of reference points, the methodology for their calculation, and most importantly the rules for constructing levels based on them, help to discard all subjectivism.
Forex trading advisors are often based at similar levels.
The DeMarker Advisor is a fully automated robot that implements a trading strategy based on a trend line breakout constructed according to the methodology of Thomas DeMark and based on a user-defined DeMark Lines indicator.
It's worth noting that trend lines are equally effective across all asset types, so the advisor can be useful to all traders, regardless of your trading preference—stocks or currency pairs.
With proper optimization, the advisor can also be used on absolutely all time frames, making it a useful development for both scalpers and long-term traders.
Installing the DeMarker Advisor
The first version of the expert advisor appeared back in 2008, but after numerous updates to the trading terminal, the advisor practically stopped working and was lost in history.
However, the theme was updated, and the advisor was completely rewritten and redesigned for new platform builds at the end of 2016. Moreover, the development was placed in the MT4 developer library.
Traders currently have two options for installing an Expert Advisor: via the library or via the trading terminal's data directory. To install via the library, launch your trading terminal, open the "Terminal" panel, and then navigate to the "Library" tab.
Then filter the list of suggested files to display only advisors. Find the DeMarker advisor in the resulting list, then download it using the additional menu, as shown in the image below:
If you encounter difficulties installing via the library, you can always use the standard setup. To do this, simply download the indicator and EA files at the end of the article and place them in the appropriate folders in the data directory.
After you restart the trading terminal or refresh it, DeMarker will appear in the list of EAs in the navigator panel. To start trading, simply drag the EA's name onto the currency pair chart.
Trading Strategy. Settings.
As we've already noted, the EA is based on the DeMark trend line methodology. Based on the DeMark Lines indicator, the EA constructs reference points along which a trend line is drawn.
The EA then detects the intersection of the trend line and opens a position with four orders simultaneously. It's worth noting that each order has a different profit and stop loss.
Therefore, if some trades close at a loss due to high market activity, the remaining trades are used to compensate for the losses. Early closure of trades also occurs after a signal in the opposite direction appears.
In the Reverse line, you can enable or disable the option to close trades and reopen them in the direction of the new signal. In the TradeLots 1, 2, 3, and 4 lines, you can set the volume for each of the four positions.
The Trade SL 1, 2, 3, and 4 variables allow you to set a stop order for each of the four positions, and the Trade TS variables allow you to set a breakeven point to which the stop will be moved if the profit is reached in the corresponding direction.
The Trade TP variables allow you to set a profit for each trade (by default, there is no profit, since trailing is enabled). In the Trailing Stop variable, you can specify the number of points after which the trailing stop will be activated step is specified in the Trailing Step line.
Testing in the Strategy Tester
To ensure the integrity of the experiment, we tested the DeMark Lines advisor on a four-hour chart of the EUR/USD currency pair for 2016 with the default settings that were valid in 2008. What came out of this, we see below:
In conclusion, I'd like to point out that the DeMarker Expert Advisor is ideal for traders with small capital, as it doesn't use averaging or martingale.
However, the profitability chart clearly shows that the settings are significantly outdated, so be sure to optimize the key parameters and conduct your own testing.
Download the DeMarker Expert Advisor
