# Demand Index

Developed by James Sibbet, this indicator is often seen as a leading signal of future price changes. Sibbet outlined six key rules for interpreting the Demand Index, which are useful for traders looking to apply it effectively:

1. A divergence between the Demand Index and prices suggests a potential price reversal.
2. A high peak in the Demand Index often comes before new price highs.
3. When prices rise but the Demand Index falls, it usually indicates a market top.
4. The Demand Index crossing the zero line signals a change in trend.
5. If the Demand Index stays around zero, it shows weak price movement that likely won’t last.
6. A long-term divergence between the Demand Index and prices points to a major market top or bottom.

To improve the accuracy of their trades, traders should combine the Demand Index with other technical indicators and chart patterns.

<figure><img src="/files/1RNUOFE5Z0CvmUxWHuXE" alt=""><figcaption><p>Demand Index indicator in Quantower platform</p></figcaption></figure>


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