Indicators: Stochastic DeMarker

 

Stochastic DeMarker:

DeMarker indicator is used in technical analysis to compare the most recent price action to the previous period's price in an attempt to measure the demand of the underlying asset. This indicator is generally used to identify price exhaustion and can also be used to identify market tops and bottoms. This oscillator is bounded between 0 and 1 and, unlike many other oscillators, it does not use smoothed data.

Technical traders primarily use this indicator as a method of identifying the riskiness of the levels in which they wish to place a transaction. Generally, values above 0.6 are indicative of lower volatility and risk, while a reading below 0.4 is a sign that risk is increasing.

This version uses the "help" of smoothed Stochastic to emphasize the states of DeMarker and to help in easier trend assessment.

Author: Mladen Rakic

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