|
|
|
|
Sequential is a series of studies designed to identify price exhaustion peaks and troughs. A series of price comparisons are made to identify these prospective turning points.
Sequential is a pattern recognition technique designated to identify both high risk and low risk entry zones. This approach is contra-trend since it anticipates areas of price exhaustion which often occur just prior to, or coincident with, price turning points. There are two components to Sequential: the Setup and the Countdown phases. Whereas minor price reversals are generally associated with the completion of Setup, major turning points are typically identified upon completion of Countdown.
A low risk Setup is a series of "X" consecutive trading bar closes less than the close "Y" trading bar closes earlier. These are displayed on a chart with blue numbers positioned beneath each respective bar. Conversely, a high risk Setup is a series of "X" consecutive trading bar closes greater than the close "Y" trading bar closes earlier. These are displayed on a chart with red numbers positioned above each respective bar.
For further information on Sequential, please refer to Thomas R. DeMark, The New Science of Technical Analysis, New York: John Wiley & Sons, 1994, Chapter 7, Sequential.