TD Sequential is designed specifically to predict potential price exhaustion and likely price reversals. This methodology is designed to become progressively less bearish as price declines and, conversely, less bullish as price advances, contradicting the behavior of most trend-following traders.
TD Sequential provides much-needed discipline and removes the emotions associated with trend trading. It also gives a distinct edge to traders who operate in size, allowing them to buy when supply is most plentiful and to sell when demand is most aggressive. Markets move in impulses or waves.
No move, either up or down, is uninterrupted. There is a natural rhythm or cadence associated with price movement in any market. This is apparent on any time frame, from one-minute to monthly. This rhythm can be measured and followed according to the tenets of TD Sequential, which has two components: 1) TD Setup, which is momentum based and compares the closing price with the close four periods earlier and, 2) TD Countdown, which is trend based and compares the close with the high or low two periods earlier.
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