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The TD Sequential indicator—that little "9 count" you see on TradingView charts—is one of those tools that just makes sense once you get to know it. Created by Tom DeMark, it's become a go-to for spotting when a strong price move in stocks, crypto, or forex is simply running out of steam.
It works on a pretty straightforward idea: markets move in waves, and every wave, whether up or down, eventually tires out. The TD9 doesn't measure speed like many other indicators. Instead, it patiently counts. It looks for nine consecutive price closes where each close is higher (or lower) than the close from four periods earlier. This counting phase is called the "Setup."
When that ninth count hits, it's like a flag goes up, suggesting the current trend might be exhausted and a reversal could be around the corner. The best part is its clarity; it's based on a simple count, so there's very little room for guesswork or emotion. This makes it incredibly useful for both manual trading and automated systems.
The entire TD Sequential process is broken down into two main parts that build on each other:
- The Setup Phase: This is the initial count from 1 to 9.
- The Countdown Phase: This is a follow-on count from 1 to 13 that can signal an even more powerful reversal.
For most traders, the Setup signals are the bread and butter—they happen often enough to find regular opportunities. The Countdown phase signals are rarer, but when they appear, they often point to much more significant shifts in trend.
Here's a quick look at how the two phases compare:
| Feature | Setup Phase | Countdown Phase |
|---|
| Count Total | 9 | 13 |
| Signal Frequency | More Frequent | Less Frequent |
| Typical Use | Short-term reversals | Stronger, more significant trend changes |
| Prerequisite | None | Must complete a Setup phase first |
In short, it's a simple counting system that helps you spot potential turning points with a solid set of rules.
