TD Sequential: What is a "completed" Setup ?

Discussion in 'Technical Analysis' started by tradertony76, Apr 10, 2009.

  1. I was recently reading Jason Perl's book "DeMark Indicators", and had a question about Setups in TD Sequential.

    Can someone please explain to me what a "completed setup" is ? I'm getting confused when it comes to recycling.

    Note: I am going to use sell setup for the scenario.

    Recycling states if you are in sell countdown and a new sell setup "completes" on before or after the completion of countdown and BEFORE the next price flip then you must check for recycle. To do this, you compare the true range of the original setup to the true range of the recently "completed" setup, and if the recently completed setup's range is equal to or greater than the original setup's range, but less than 1.618 times the original setups range, then the coundown recycles and the recently completed setup becomes the active setup.

    HOWEVER, there is a sticking point here. A setup is composed of 9 OR MORE consecutive closes.

    So at what point do you take the measurement, ie what point is the sell setup "completed" ?

    If you checked on candle 9 of the new setup, it is possible that the new setup will continue on past 9 candles, and thus its range will expand.

    So is the new setup not "complete" until at least candle 9 AND a bear price flip occurs, thus locking in the range of the new setup ?

    Do you postpone checking for recycle until this price flip so you are guaranteed that you know the new setups range is "locked in" ?

    Bascially I'm trying to figure out at what point you compare the ranges of the original and the new setup.