TD Sequential

TD Sequential is a proprietary counting system developed by Tom DeMark that identifies probable trend-exhaustion points through a mechanical 9-count followed by a 13-count countdown. The system's strict rules make it reproducible and backtestable: a TD9 setup counts 9 consecutive candles closing higher than the close 4 bars earlier (in an uptrend setup) or 9 consecutive lower closes relative to 4 bars earlier (downtrend setup). The 13-count countdown follows, testing further trend extension conditions before signaling probable reversal.

The strategies in this category trade the three canonical TD Sequential moments. TD9 Reversal trades the setup completion itself. The 9th bar of an exhausted trend, entering against the trend with tight stops. TD Countdown 13 waits for the more reliable (but less frequent) full countdown completion. TD Perfected Setup adds the "perfection" filter. Bars 8 and 9 must exceed the highs (or undercut the lows) of bars 6 and 7. which historically improves the signal's hit rate at the cost of fewer fires. TD Sequential is among the most mechanically-defined reversal systems available and has been published in peer-reviewed studies with positive expectancy on index futures. The failure mode is counter-trend bias: in very strong trends, TD9 setups fire multiple times before a reversal actually occurs. Combine with higher-timeframe structure to filter out setups against dominant trends.