What the DeMarker indicator shows
The DeMarker indicator is an oscillator. An oscillator is a line that moves inside a fixed range below the price chart. DeMarker compares each bar's high and low with the high and low of the bar before it.
- If buyers push highs above earlier highs more often than sellers push lows below earlier lows, the line rises toward the top of its range.
- If new lows dominate, the line falls toward the bottom.
Readings near the top are often called overbought, and readings near the bottom oversold. Our overbought and oversold guide explains what these labels mean and what they do not mean.
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Formula
For each bar:
- DeMax = current high minus previous high, if the result is positive. Otherwise it is zero.
- DeMin = previous low minus current low, if the result is positive. Otherwise it is zero.
Then, over a chosen period N:
DeMarker = SMA(DeMax, N) ÷ (SMA(DeMax, N) + SMA(DeMin, N))
SMA is a simple moving average, explained on our SMA indicator page. DeMarker uses only highs and lows, not closes. This is how it differs from the RSI indicator, which uses closing prices.
DeMarker settings in MT4 and MT5
In MetaTrader 4 and MetaTrader 5, open Insert → Indicators → Oscillators → DeMarker. You can also drag it from the Navigator window onto the chart.
- Parameters tab: set the period. The default is the value MetaTrader fills in.
- Levels tab: set the upper and lower reference lines.
A shorter period makes the line react faster and produces more extreme readings. A longer period smooths it and keeps it near the middle for longer. Test any change on a demo account before relying on it.
How to use DeMarker: reading an example
The sketch below is a drawing, not real market data:
In the drawing, price makes a higher peak on the right, but the DeMarker peak is lower. This mismatch is called divergence (see divergence trading). It shows that the push to new highs was weaker. It does not say what price will do next.
Common ways traders use DeMarker:
- To judge whether a move is stretched relative to recent bars.
- As a filter alongside support and resistance or the trend on a higher timeframe.
- To spot divergence between price and momentum.
When DeMarker misleads
- Strong trends: the line can stay near an extreme for a long time while price keeps moving the same way.
- Gaps and spikes: a single large bar distorts DeMax or DeMin for the whole period.
- Flat, quiet markets: small changes in highs and lows make the line swing without meaning.
- Inside bars: bars that stay within the previous bar's range add zero to both sides, so the line can drift toward the middle.
No indicator setting removes these problems. Leveraged forex and CFD trading can lose money fast, so read risk management before trading with any oscillator.
Frequent questions
Is DeMarker a leading or lagging indicator?
It is built on moving averages, so it lags price. See leading vs lagging indicators for more.
Does DeMarker repaint?
No. Values on closed bars do not change. The value on the current bar changes until that bar closes.
Is there a best DeMarker strategy?
No setting or strategy works in all conditions. Treat DeMarker as one input among several, not as a signal on its own.
How is DeMarker different from Williams %R?
Williams %R places the close within a recent range. DeMarker compares bar-to-bar changes in highs and lows.