Demand Index

The Demand Index is a technical indicator that uses both price and volume to measure buying and selling pressure in the market.

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.

Demand Index indicator in Quantower platform