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Forex Online Trading? DeMarker Indicator As A Trading Tool

Trading in the Forex market has become easier during the last couple of years. The trading platforms are more user-friendly than they were years ago. They also offer a lot of tools that are useful in analyzing the market.

It can be difficult to know all the trading tools and which one to use. One way is to test different tools in different market situations.

A test could be 20 trades with the simple moving average and the stochastic oscillator where the simple moving average is the primary indicator and the stochastic oscillator is the secondary indicator.

A test could also consider the indicators the Bolling Bands and the stochastic oscillator where the Bolling Bands are the primary indicators and the stochastic oscillator is the secondary indicator.

The mentioned tests are examples of a way to test the trading tools.

Testing is a process and it is advisable to test different tools during the years. The goal in testing the tools is to find the right trading tool the trader feels comfortable with in different market situation but also to improve trading skills and profit margin.

One of the trading tools the online platforms offer is the DeMarker indicator also called DeM. It was developed by Tom DeMarker and is used to determine when the currency pair is oversold and overbought. The indicator is also used to assess risk levels and price exhaustion.

The DeM is an oscillator and a less known indicator. It fluctuates in a range between 1 and 0. The indicators or warning signals are when the DeM curve crosses the 0.30 line and the 0.70 line. The signals tell the traders that it is a lit bit riskier to trade as the demand will start to change in the near future.

The demand is expected to fall if the DeM curve is rising over the 0.70 line and if the curve is decreasing under the 0.30 line the demand is expected to rise.

In a trading situation the trader wills determines when to buy after the DeM curve has crossed the 0.30 line and when to sell after the curve has crossed the 0.70 line. In determining when to buy and sell the trader need one or more indicators than the DeM indicator.

A test could be 20 trades with the Bolling Bands as a primary indicator and the DeMarker indicator as a secondary indicator.