In the ever-changing cryptocurrency market, there is an indicator that serves as a beacon in the dark, guiding traders to key turning points—this is the TD Sequence Indicator. Today, let us unveil the mystery of this market turning point detector cherished by professional traders.
How TD9 Works: When the closing prices of 9 consecutive candlesticks are all lower than the closing price of the 4th candlestick prior (a down sequence), it triggers a red TD9 buy signal; conversely, when the closing prices of 9 consecutive candlesticks are all higher than the closing price of the 4th candlestick prior (an up sequence), it generates a green TD9 sell signal. This design essentially quantifies the market's "overbought and oversold" states—much like a spring that inevitably rebounds after being compressed to its limit.
Understanding the Dual Nature of the TD Indicator
The most fascinating characteristic of the TD Sequence is its bidirectional signal system: the red TD9 represents a buying opportunity after excessive market selling, while the green TD9 suggests a shorting opportunity as upward momentum wanes. However, it is important to note that this is by no means a "holy grail indicator"—during the continuous decline of BTC in July, traders who prematurely relied on TD9 to catch the bottom faced the challenge of seven consecutive losses. This reinforces our research institute's core view: indicators themselves do not create miracles; the key lies in how traders utilize them.
The Art of TD in Practice
Observing BTC's performance over the past three months, the red TD9 signals that appeared during the upward trend are particularly valuable. They often do not mark the end of a trend but serve as relay points for accelerated upward movement.
Just like last month, when most retail investors hesitated due to fear of heights, the red TD9 accurately marked the best entry point from $58,000 to $64,000.
The TD signals for ETH demonstrate even greater sensitivity. In the recent round of adjustments, TD9 captured the phase bottom near $2,450 three times in a row, with an error margin of no more than 1.5%. This level of precision makes ETH an ideal testing ground for implementing TD strategies.
Advanced Usage for Smart Traders
Trend Filtering Method: Only trade when the TD9 signal aligns with the direction of the EMA30, which can help avoid 60% of false signals during the downturn in July.
Position Sizing Strategy: Particularly suitable for spot investors—buy 10% of your position each time a red TD9 appears, ensuring you don’t miss opportunities while retaining some capital.
Cycle Resonance: Combining the TD9 on a 15-minute chart with the RSI oversold on a 4-hour chart can significantly enhance the win rate (see Figures 5-7 for multi-cycle comparisons).
Our backtesting of the TD strategy shows that using TD9 for buying and selling on the BTC 4-hour cycle can yield an annualized return of 142%, but the maximum drawdown can reach 38%. However, when incorporating ADX trend filtering, the drawdown is immediately compressed to below 22%. This vividly illustrates: there is no perfect indicator, only perfect combinations.
Special Reminder
When encountering the following situations, please temporarily set aside the TD indicator:
Before and after major policy announcements (e.g., ETF approvals)
When there are unusually large liquidation orders on exchanges
When the premium rate of stablecoins exceeds 3%
The TD indicator is like an honest guide; it won’t tell you where the destination is, but it will clearly point out which intersections are worth stopping at. Remember, in this market, the real money is made not by the most complex systems, but by the traders who adhere to discipline the most rigorously!
This article represents the author's personal views and does not reflect the stance or views of this platform. This article is for informational sharing only and does not constitute any investment advice to anyone.
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
