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The demark forex trading strategy is a price action trading system with a reasonable risk: reward (R: R) ratio if a trade works out as anticipated.

The creator of this trading system is a guy called Tom Demark.

The demark system is a trendline breakout trading strategy but with a slight variation:

the most recent highs (peaks) and lows (troughs) are used to draw the trendlines.

Timeframes: any can be used, but I suggest you use a 15-minute timeframe and above.

Currency Pair: You can use this trading system to trade any currency pair.

Forex Indicator: none required.

Anything else?: You should know how to draw trendlines.

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Demark Forex Trading Strategy Rules

  1. Find two most recent highs or lows and draw a trendline.
  2. Wait for the chart breakout of the trendline to happen. A breakout happens when a candlestick closes above/below a trendline and that candlestick that does that is called a breakout candlestick.
  3. If the lower trendline is broken, place a pending sell stop order two pips below the low of that breakout candlestick. Or, if the top trendline is broken, place a pending buy stop order two pips above the high of the breakout candlestick.
  4. Stop-loss should be placed 5-10 pips below/above the low/high of the breakout candlesticks or just a few pips outside of the most recent low/high for sell and buy trades, respectively.
  5. You may use the risk: reward ratio of 1:3 to calculate the profit target or use a previous swing high and swing low for buy and sell trade. demark-forex-trading-strategy
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Advantages Of The Demark Forex Trading Strategy

  • Good potential to catch the start of a new trend and ride it.
  • This forex trading system also allows you to hop into a trend that has been progressing for a while.
  • reasonable risk: reward ratio

Disadvantages Of The Demark Forex Trading Strategy

  • The breakout candlestick sometimes can be very long, making your stop loss distance very large, so in such a case, the best other option is not to trade that setup.
  • This is not the forex holy grail trading system; false breakouts will happen.

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Read More: Daily Candlestick Breakout Forex Trading Strategy

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