The DeMarker indicator: how to read and trade DeM
The DeMarker (DeM) is an oscillator that measures demand exhaustion by comparing each bar's high and low to the previous bar's, plotted on a 0–1 scale. Readings below 0.30 mark oversold conditions and readings above 0.70 mark overbought. Its best use is not calling tops and bottoms — it is timing pullback entries inside an established trend.
What DeM actually measures
Most oscillators (RSI included) are built from closing prices, so they measure the momentum of where bars settle. DeMarker compares highs against prior highs and lows against prior lows — it is asking a different question: is buying pressure still making progress, or is demand exhausting? When a rising market keeps closing well but stops printing meaningfully higher highs, DeM rolls over before a close-based oscillator notices. That makes it unusually good at flagging the moment a healthy trend pauses to breathe.
The wrong way and the right way to use it
The wrong way is counter-trend: shorting every reading above 0.70 in an uptrend gets run over, because strong trends stay overbought for weeks. The right way inverts the logic:
- Establish trend first. We use the EMA cluster — price holding above rising 21/55/200-day EMAs is an uptrend; no DeM reading overrides that.
- Wait for DeM to reach oversold within the uptrend. An oversold reading in a rising market is not a sell signal; it is a dip being offered.
- Buy the pullback zone, not the print. The DeM signal times the area; the entry still wants a level (a 21-EMA tag, prior resistance turned support) and a stop beneath it.
On our GBP/NZD swing sequence, this exact combination — rising EMA cluster plus DeM oversold — flagged three separate dip-buying entries during one trend leg. That chart is question 1 of the Trader IQ Challenge if you want to try reading it cold.
Adding DeM to your platform
- MetaTrader 4/5: Insert → Indicators → Oscillators → DeMarker, period 14. The native version is a plain line, but the levels work.
- TradingView: the built-in “DeMarker” indicator ships with every plan — add it from the Indicators search on TradingView, default period 14.
- The RB version: our members use an invite-only TradingView build (DeM Trend Bias Strength) that colour-codes the histogram by trend alignment and can fire an alert when a pair goes oversold inside an uptrend — the same signal, minus the screen-watching. It is part of the RB Trading membership indicator suite.
DeM vs RSI in one table
| DeMarker | RSI | |
|---|---|---|
| Built from | Bar highs/lows vs prior bar | Closing prices |
| Measures | Demand exhaustion | Close-to-close momentum |
| Scale | 0 to 1 (0.30 / 0.70) | 0 to 100 (30 / 70) |
| Best use | Timing pullbacks within a trend | Divergence and momentum regime |
They are cousins, not rivals — but if your strategy is buying dips in trends, DeM answers the exact question you are asking. For how it fits alongside other tools, see our education hub's swing-trading indicator roundup.
Frequently asked questions
What are the best DeMarker settings?
Period 14 is the standard, and the 0.30 oversold / 0.70 overbought levels assume it. Rather than shortening the period to get more signals, keep 14 and add a trend filter — the quality of DeM signals comes from only taking the ones aligned with the prevailing trend.
Is DeMarker better than RSI?
Neither is better outright; they measure different things. DeM is built from bar highs and lows, so it reads demand exhaustion and tends to flag trend pullbacks earlier; RSI is built from closes, so it is the cleaner tool for divergence work. For a dip-buying strategy inside trends, DeM answers the more relevant question.
Can DeMarker be used for day trading?
Yes — the indicator works on any timeframe, and the same trend-plus-pullback logic applies on a 15-minute chart as on a daily. The caveat: on low timeframes DeM whipsaws more, so the trend filter matters even more, and signals against the session's direction are best skipped entirely.
Get the free letter behind these guides
Inside the Trade is RB Trading's free newsletter: real trade reasoning, risk and psychology, written from a live desk. Join free, unsubscribe in one click.