TD Sequential Indicator
Counting Reversals in Any Market
From the 9-count setup to the 13-count signal — the complete professional guide to TD Sequential for timing market tops and bottoms.
Introduction to TD Sequential: Timing Market Reversals
TD Sequential, developed by Tom DeMark, is a momentum-exhaustion indicator designed to identify potential price reversals by counting bars relative to prior price action. Unlike oscillators, it provides a structured countdown that works on any timeframe and asset class.
The indicator has two main phases: the Setup (counting to 9) and the Countdown (counting to 13), each signaling increasing exhaustion of the prevailing trend.
Official TDSequential documentation: https://school.stockcharts.com/doku.php?id=technical_indicators:demarker
Beginner Level: The Setup Phase — Counting to 9
The Setup phase counts 9 consecutive bars where the close is lower (bearish setup) or higher (bullish setup) than the close 4 bars earlier.
Buy Setup (Bullish)
- 9 consecutive bars closing below the close 4 bars prior.
- Signals bearish exhaustion — potential bullish reversal.
Sell Setup (Bearish)
- 9 consecutive bars closing above the close 4 bars prior.
- Signals bullish exhaustion — potential bearish reversal.
Key Rules
- Count resets if the condition breaks before reaching 9.
- A "perfect" setup (bar 8 or 9 low below bars 6 and 7 low for buy) is stronger.
Pro Tip for Beginners
Use the Setup alone on higher timeframes (daily/weekly) to identify major reversal zones without trading the countdown.
Intermediate Level: The Countdown Phase — Counting to 13
Once a Setup completes, the Countdown begins, counting to 13 with different rules:
Buy Countdown Rules
- Bar's close must be less than or equal to the low 2 bars earlier.
- Count only advances when the rule is met.
Sell Countdown Rules
- Bar's close must be greater than or equal to the high 2 bars earlier.
A completed 13-count (Countdown) is a high-conviction reversal signal, especially when aligned with:
- Key support/resistance levels.
- VWAP or volume profile POC.
- Fibonacci retracement zones.
Intermediate Strategies
- Trade the 13 completion with a tight stop beyond the Setup extreme.
- Look for "deferred" 13s (Countdown recycling) as continuation signals.
Advanced Level: TD Sequential Across Timeframes
Multi-Timeframe Alignment
- Weekly 9 or 13 + Daily 9 = extreme reversal zone.
- Hourly Setup at weekly support = institutional entry zone.
TD Combo
An alternative countdown that completes faster (also 13, different counting rules), useful for volatile assets like crypto.
Advanced Confluence
- TD 13 at Fibonacci 0.618 retracement with footprint absorption = elite entry.
- TD 9 at VWAP reclaim after liquidity sweep = high-R:R setup.
Risk Management
- Stops: Place beyond Setup high/low (for sell/buy setups).
- Targets: Next TD Setup completion on lower timeframe.
Expert Workflow: Settings, Optimization, and Risk Management
Expert Settings on TradingView
- Use the built-in "TD Sequential" or community scripts by authors like @glaz.
- Display both Setup (9) and Countdown (13) labels; hide intermediate counts to reduce clutter.
- Colors: Green for buy signals, red for sell signals.
Pro Workflow
- Daily scan: Identify weekly TD 9/13 completions as macro bias.
- Intraday: Enter on lower timeframe TD 9 in direction of weekly signal.
- Confirmation: Wait for price close beyond Setup bar before entering.
Risk Management
- False signals increase in choppy, low-volatility markets.
- Never trade TD signals in isolation — always require confluence.
Optimization
- Backtest across multiple assets and timeframes to find where it performs best.
- Crypto tends to respect TD signals well due to retail-dominated markets.
Conclusion & Next Steps
TD Sequential provides a structured, objective framework for identifying exhaustion and potential reversals — a rare edge in discretionary trading.
Key Resources
- StockCharts TD Sequential Guide: https://school.stockcharts.com/doku.php?id=technical_indicators:demarker
- TradingView TD Sequential Script: https://www.tradingview.com/script/Wr7sSRlC-TD-Sequential/
- Tom DeMark's Book — The New Science of Technical Analysis
Further Reading & Resources