Tom DeMark absolutely relies on the timing of market transactions
Trader and consultant Tom DeMark (Tom DeMark) recently invented dozens of original technical indicators and relies solely on the technical principles of timing in their research and trading. Once he even signed up for the program CFA (certified financial analyst - Certified Financial Analyst), but decided not to pass it through. "The markets are characterized by long-term baseline. But my indicators measure psychology - this is what the technical analysis "- explains Demark.
The first dive of Demark in the financial world came after graduate school in two specialties - business and law, after which he was in the early 70's was appointed to the position of the fundamental analyst in the company, National Investment Service, located in Milwaukee, WI (Wisconsin). The company managed pension funds and assets to the joint profit in the amount of approximately $ 300 million by investing primarily in equities and fixed income shares. Power of National Investment Service was in the right timing. Demark, but remembers well his first job: "I was a professional gofer. I've been following all of the company, but quickly got up, because it is well able to choose the time for operations. "
"My goal was to work with a small group of progressive-minded people", - DeMark said. The firm was able to avoid the stock market crash in 1973 and 1974, it managed assets grew to $ 6 billion "in 1974 was severe. The Dow Jones fell from the level just above the 1000 to 570 during the political crisis with Nixon. The stock market declined by 50% ", - says Demark. However, the company has managed to avoid disaster through skillful timing. "They just gave me permission to do whatever I want, - DeMark said. - I went swimming in an independent and began working on the commodities market. My bosses did not object to diversification, which I spent alone. " In general, DeMark believes "the commodity side of (business) attracts more creative people, because the inherent leverage of these operations is very big."
In 1978, Demark organized financial consulting division within National Investment Service. "Our client list of a book," Who's Who "in the industry - said DeMark. - I continued to diversify, providing the timing of transactions in stocks and commodities that occurred ... fixed income yield subsidiary was higher than that of the founder. " However, in 1982, DeMark retired from the firm and continued consulting activities. "I had a total of $ 120 billion of assets in bonds subject to redemption," - he said.
On the eve of the stock market crash in 1987, one indicator of Demark gave the signal to sell stocks. Shortly thereafter, DeMark was appointed executive vice president in the firm of Paul Tudor Jones (Paul Tudor Jones), and continued his market research and systems development.
On the basics of his research DeMark says that "it is - at 100% for the timing of operations. This antitrend is kontrtrend, is to recognize patterns and falling prices. " DeMark believes his technical indicators differ from others because they are "fully automatic and objective, and, as well as going against the mainstream."
One of the widely known technical indicators, Demark, which he registered under the trademark Sequendal, is a "cyclical approach to market analysis, which is the determinant of the market itself. People working with loops, usually cut into pieces the same time. I argue that individual trading days the market is not play a role. I'm trying to make comparisons with price activity and activity of the past. "
In a series of articles that appeared during the year, starting in August 1995 in the journal Futures, Demark detailed coverage of many of its indicators. Readers are referred to these publications for more in-depth analysis. DeMark is the author of the book "New Art of Technical Analysis", published by John Wiley & Sons, Inc. in 1994. Demark is finalizing a new book titled "New Technologies for the timing of market transactions: pioneering research of the market rate and falling prices," which he intends to publish in spring 1997. "I'll be releasing 20 new indicators. Four of them were used by me in the few, when I worked at Tudor, plus the ones I worked with Larry Williams (Larry Williams) », - DeMark said.
When asked whether he gave the preference to any particular market, DeMark responded in the negative. "All I did was applicable to all markets", - he said.
"I try to cover all aspects of technical analysis and leave some variables open so that the readers could do research" - DeMark said. Despite this, it lights up to 99% "automatic and, factual, and simplified." However, he said, to secure trading systems or indicators of good enough. "Management of cash and important discipline system. In fact, good discipline, knowledge of their (personal) and the limits of good management of funds are far more important than the system or indicator, "- said DeMark.
Council of Demark beginners? "More read. A little more experimenting. Do not handle the trading, without having done their homework. Make sure your technique is objective - it must be completely defined process ", - said the completion of Demark.