DailyDeMark here… I want to make a comment that was made by Marie on the previous page. You absolutely must not trade the Setup 9 count based purely on the “perfection” setup. There is a 3rd requirement not discussed by anyone here: That requirement is that the current TD Setup must not break through the TDST line that was established by the previous TD Setup in the opposite direction.

I.E.
XYZ records a TD Sell Setup. The lowest low of that Setup period is $50/share – that puts the TDST price line at $50/share. Current price is $60 share. XYZ moves into consolidation mode and then shows weakness. A sell off occurs and a TD Buy Setup occurs. When the 9 bar closes, price is at $55 share. The new TD Setup (a Buy Setup) did not have sufficient momentum to break through to the downside of the TDST line at $50.

DeMark suggests that this is the only time you trade a Setup 9 count. He would suggest that there will be a reversal to the upside.

Remember, the TD Sequential is not only a price analyzer but a real-time momentum indicator. That is why you cannot trade a 9 count only. A TD Setup demands a high degree of momentum,an amount of momentum that rarely is followed by an immediate reversal. If you look at the NASDAQ ETF QQQQ since late May, there have been three completed setups. All of them were immediately followed by a very brief period of consolidation or weakness… followed immediately by another Setup. You would have lost money each time.

One more note… do not trade against the Sequential trend that is a factor of five above your trading time frame. If you are trading daily bars, check the trend on Weekly bars. If you are trading 15 minute bars, check the hourly bars for the trend. Do not trade against the trend. Common sense.

via Forex-Strategies-Revealed