What Is TD Sequential?
TD Sequential is a momentum exhaustion indicator developed by Tom DeMark in the 1990s. It's designed to identify when a trend is running out of steam and a reversal is likely.
The system is used by institutional traders, hedge funds, and retail traders worldwide. Bloomberg, Reuters, and most major charting platforms have built-in versions.
This implementation is a private, closed-source Pine Script. The source code is not publicly available. The indicator can be added to your chart if you have access, but the underlying logic cannot be viewed or copied.
Signal Reference
| Signal | Meaning | Action |
|---|---|---|
| Setup 9 | Directional momentum is exhausted | Prepare for reversal — don't enter new positions in trend direction |
| Countdown 1–12 | Reversal is building | Watch for confirmation |
| Countdown 13 | Reversal is confirmed | Highest-probability entry in the opposite direction |
The Two Phases
The system operates in two sequential phases. Setup must complete before Countdown begins.
Counts 9 consecutive bars where each close is higher (or lower) than the close from 4 bars ago.
Close > Close[4] for 9 bars = Bullish setup
Close < Close[4] for 9 bars = Bearish setup
If the sequence breaks before reaching 9, the count resets to 0.
After a setup 9, the script counts 13 qualifying bars — these do NOT need to be consecutive.
Buy: Close ≤ Low of 2 bars ago
Sell: Close ≥ High of 2 bars ago
When the count reaches 13, the strongest reversal signal fires.
How Each Phase Works
What You See on the Chart
How to Use TD Sequential
Step 1 — Watch for Setup 9. When a "9" label appears, the current trend is exhausted. Don't enter new positions in the trend direction. Prepare for a potential reversal.
Step 2 — Monitor the Countdown. After setup 9, countdown bars begin accumulating. You don't need to count manually — the labels do it for you.
Step 3 — Wait for Countdown 13. When "13" appears, this is the primary reversal signal. Combine with support/resistance or volume confirmation before entering.
Step 4 — Manage the Trade. Use the horizontal lines at the 9 and 13 levels as reference points. The 13 level often acts as support or resistance after the signal.
Step 5 — Use Higher Timeframes. A 13 on the daily chart carries more weight than a 13 on the 5-minute chart. For day trading, use 5m or 15m. For swing trading, use daily or weekly.
When It Works Best
Any market — stocks, futures, forex, crypto
Range-bound markets — countdown 13 signals are most reliable when price is oscillating
End of trend — setup 9 at a key support/resistance level is high-conviction
Not standalone — needs confirmation from other tools
Repainting risk — always use with barstate.isconfirmed to avoid false signals
1-minute chart — too noisy, generates excessive signals
Default Parameters
| Parameter | Default | Description |
|---|---|---|
| Show TD Sequential | true | Master toggle for the entire module |
| Show TD Lines | true | Horizontal lines at 9 and 13 levels |
| TD Pulse on Countdown | true | Yellow pulse dot at countdown 13 |
| Show Intermediate Counts | false | Numbers 1–8 during setup phase |
| Show Countdown Counts | false | Numbers 1–12 during countdown phase |
| Label Offset % | 0.05 | Vertical offset for labels above/below bars |
| Label Size | small | tiny / small / normal / large / huge |
| Extend Lines Forward | 20 | How many bars the horizontal lines extend |