Articles & Videos & Calculators                 Product guide             Trading IQ Game with great prizes               Support HomeSite Map - Testimonials
PTS Demand Index ( DI ) for MetaTrader 4

Roger Medcalf 2016 - 2017 ... You may not reprint text or images without permission

If you require this product for a different Trading Platform then please see the product guide for the other supported platforms.

Demand Index was invented by James Sibbet and coded by Precision Trading Systems for MT4

Demand Index is the creation of James Sibbet, and uses complex code to make simple work of the interpretation of volume and price as a combination. Understanding volumes is never an easy task but this beautiful piece of programming certainly makes like a lot easier.

There are several ways in which this indicator can benefit traders and investors alike.

Divergences

Having studied many technical indicators over the years I have formed the opinion that Demand Index is one of kings of finding meaningful divergences.

If the price of the market is making a new high and the Demand Index is not this is known as a bearish divergence. There are several drastic photos below showing extreme cases of divergences to help you understand what to look for.

Trend detection

The crossing of the zero line is an indication of net selling or buying over the length you have specified, it must be noted that in this manner the indicator is acting as a lagging indicator and longer lengths are required with some smoothing to give meaningful results.

Notwithstanding the above it is important to understand the difference between a "real crossing of zero" trend change move and a false signal.

If Demand Index is hovering and fluctuating around zero it does not mean much, but a decisive break though which stands out is the kind of move that one needs to look for.

Break outs

When a range or tight congestion area can be seen in the Demand Index indicator it is well worth noting that when a break out from this range occurs, it will likely be followed by a break out in the same direction of the underlying market.

As with the above it is also important to know the difference between noise and a real break out pattern, this must be an obvious observation and if you have to spend time asking yourself if it is real or not then it probably is not a good signal.

Prediction of next movement

When an extreme peak in Demand Index occurs it implies serious buying and this is usually followed by one more move up from the market. There is a photo lower down the page showing an example of this.

Extended divergences over a period of time

When a market continues to trend down and the Demand Index continues to trend up this is a sign of a major bottom forming and vice versa.


 

Demand Index length 50 for MetaTrader4 below signals a price dive as it crosses below zero
Dax 30 ( 30 minute chart )
 
Demand Index MT4

Demand Index length 50 below having a break out and crossing above zero just before the market moved up

Daily chart Dax 30

This indicator often works better with longer lengths such as 30, 50 or 100
Demand Index breakout

To make interpretation simpler a smoothing feature has been added to Demand Index for MT4

Below length 80 with smoothing 12 shows the downtrend starting and stays below 0 as the price declines

15 minute chart of Nikkei 225

Demand Index Nikkei

Demand Index length 100 below having a monster divergence with the price AND an extreme peak

As stated above, the extreme peak signals a single higher peak is coming

The divergence thereafter calls it a bearish move ahead

Chart Nasdaq 100 on a 1 minute time frame

Demand Index Divergence

PTS Demand Index for MetaTrader 4

Rent for $15 per month or $95 lifetime Free trial demo.

To rent or purchase or try a demo, please click the link below which leads to MetaTrader website

Buy PTS Demand Index customer indicator in the store selling algo trading systems

 


Demand Index length 14 with 20 smoothing below showing a big divergence which lead to a big drop in price

ESTOXX 50 4 hour chart


Demand Index Divergence sell

Below is an example of a bullish divergence with a lower low on the market price of a 5 minute chart of the French CAC 40 and a higher low on the Demand Index when looking at the same time.

Demand Index no smoothing length 50

Another example of the future price direction of the SP500 futures being predicted by Demand Index

Notice how well it correlates with what happened in the market, but shows it BEFORE it happens.

One must not become deluded and expect this to predict the future, a better outlook is to use the analogy of cloud examination.

How do we establish if it going to rain?

We look to see if there are clouds, if there are we look to see the colour they are.

If the clouds are grey or black then we can reasonably expect a strong probability of rain soon.

Demand Index advance warning

Realising the power of Demand Index divergences they became one of the key components of the Precision Index Oscillator below

Precision Index Oscillator below was designed to do all the hard work so you don't have to,

Simple highlights are painted when its in position.

Please see the home page for Pi-Osc release date or sign up to get email notification when product is released

Piosc for MT4

Below: The extreme peak in Demand Index heralds a clear warning that prices will move higher soon.
 SP500 futures on a 5 minute chart.


Demand Index peak


PTS Demand Index for MetaTrader 4

Rent for $15 per month or $95 lifetime Free trial demo.

To purchase or try out a demo, please click the link below which leads to MetaTrader website

Buy PTS Demand Index customer indicator in the store selling algo trading systems

 

 

 

FAQ for dummies

 

 

Question:

 

I wonder if you can tell me the best timeframes chart to use Demand Index in? 

 

Answer:

 

That is a very good question. As with most systems and indicators reliability of signals is improved with increases in data sampling frequencies. 

 

However I have noted the charts of very slow time frame like 1 month don't tend to be very good, neither do very short term charts of 1 minute or 5 minute.

 

E.G. A 15 minute chart would tend to give more reliable signals  than a 1 minute chart and a daily chart would tend to be more reliable than 4 hourly chart.

The best course of action to take is to experiment by plotting Demand Index on many different time frames until you find the one which works best.

Looking for the holy grail?

Its often turns out to be a stopwatch ---->

 

 

Question:

Do you have Demand Index for Think or Swim (TOS) or NinjaTrader?

Answer:

 

I have a version for NinjaTrader7 and these other platforms. Please sign up to get notified when it is ready for Think or Swim

 

Please follow the links ------>

 

Demand Index for NinjaTrader

Demand Index for MultiCharts

Demand Index for MetaTrader

Demand Index for Tradestation

   

 

Trading IQ Game Banner 

   Articles & Videos & Calculators                 Product guide             Trading IQ Game with great prizes               Support HomeSite Map - Testimonials

 

Precision Trading Systems is provider of the following

 Introduction

 Precision Trading Systems is partnered  with MultiCharts.

 Precision Trading Systems is part of the NinjaTrader ecosystem.

 Systems and Indicators for Tradestation, NinjaTrader and MultiCharts.

 Top quality paid & FREE trading systems and indicators for most platforms

 Members can receive some paid products completely FREE

 Roger Medcalf is a vendor on the Tradestation App store

 Roger Medcalf is a vendor of products of MetaTrader 4

  Free to play Trading IQ Game with generous PRIZES  from our sponsors.

  Member log in

 

RISK DISCLOSURE

 

  • Futures, Forex and Stock trading contain substantial risk and are not for every investor.

  • An investor could potentially lose all or more of the initial investment.

  • Risk capital is money that can be lost without jeopardizing ones financial security or lifestyle.

  • Only risk capital should be used for trading

  • Only those with sufficient risk capital should consider trading.

  • Past performance is not necessarily indicative of future results

 

HYPOTHETICAL PERFORMANCE DISCLOSURE

 

Hypothetical performance results have many inherent limitations, some of which are described below. no representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect trading results.