Demand Index

Demand Index combines price and volume in a special way, so it often serves as a leading indicator of price changes. The Demand index was developed by James Sibbet.

James Sibbet formulated six rules for interpreting the demand index:

• A divergence between the demand index and prices signals an upcoming price reversal.
• Extremely high values of the demand index often precede the formation of new price highs (the index is a leading indicator).
• The combination of a new price high with a lower peak of the demand index usually falls on an important price peak (the index is a synchronous indicator).
• Crossing of the zero level by the demand index usually occurs after a price trend reversal and serves as its confirmation (the index is a confirming indicator).
• If the demand index constantly fluctuates around zero, the current price trend has weak potential and will not last long.
• A significant long-term divergence between prices and the demand index indicates an important market top or bottom.

The indicator view in the chart.

The indicator has the following parameters:

Period

Buy/Sell Power - setting of the volume values calculation period.

Smooth

Buy/Sell Power - setting of the volume values smoothing period.

Moving Average - setting of the indicator values smoothing period.

Drawing
Panel - selection of the indicator location in the chart:

• New panel
• Chart

Indicator, Moving average

Show value - display of the indicator value on the price scale.

Show zero values - display of zero values.

Scale/Auto-scaling - if this option is on, the scale will be automatically calculated, based on the minimum and maximum indicator values, so that the indicator would fit in the chart.

Color

Visual type - visual setting of the indicator display in the chart:

• Line
• Histogram
• Hash
• Block
• Cross
• Square
• Dots
• Up arrow
• Down arrow
• Axis label
• Hide

Line style - setting of the line display style:

• Dot
• Solid
• Dash
• Dash - dot
• Dash - dot - dot

Width - setting of the indicator line width.