# 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="https://4186075531-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-LD6FsRvQ3jgwJIg6O7r%2Fuploads%2FKNOlZXHoGmtpkfz9x2Vh%2FStarter_MXjC8bjRCa.png?alt=media&#x26;token=68b0588a-75d2-483c-aae0-8fd4e40090da" alt=""><figcaption><p>Demand Index indicator in Quantower platform</p></figcaption></figure>