Mastering the TD Indicator: Unveiling the Magical Code of Market Turning Points

In the ever-changing crypto market, there is an indicator that serves as a lighthouse in the dark, guiding traders to key turning points—it is the TD Sequential indicator. Today, let us unveil the mystery of this market turning point detector treasured by professional traders.

The operating principle of TD9: When the closing prices of 9 consecutive K-lines are all lower than the closing price of the previous 4th K-line (downward sequence), a red TD9 buy signal is triggered; conversely, when the closing prices of 9 consecutive K-lines are higher than the closing price of the previous 4th K-line (upward sequence), a green TD9 sell signal is generated. This design essentially quantifies the market's "overbought and oversold" state—just like the inevitable rebound when a spring is compressed to its limit.

Understanding the duality of the TD indicator The most fascinating characteristic of the TD sequence lies in its bidirectional signaling system: the red TD9 indicates a buying opportunity after a market oversell, while the green TD9 suggests a shorting opportunity as upward momentum wanes. However, please note that this is by no means a "holy grail indicator"—traders who prematurely bottom-fished based on TD9 during the continuous decline of BTC in July faced the challenge of seven consecutive losses. This reinforces the core view of our research institute: the indicator itself does not create miracles; the key lies in how traders utilize it.

The Art of TD in Practice Observing the BTC trend over the past three months, the red TD9 signals that appear in the upward trend are particularly valuable. They are often not the end of the trend, but rather a relay station for accelerating upward.

Just like last month, when most retail investors hesitated due to fear of heights, the red TD9 accurately marked the best entry points from $58,000 to $64,000.

The TD signals of ETH demonstrate a stronger sensitivity. During the recent round of adjustments, TD9 captured the phase bottom near $2450 three times in a row, with an error of no more than 1.5%. This level of accuracy makes ETH an ideal testing ground for implementing TD strategies.

Advanced usage of smart traders

Trend filtering method: Only trade when the TD9 signal is consistent with the direction of EMA30, which can help avoid 60% of false signals during the decline in July.

Segmented warehouse strategy: especially suitable for spot investors - buy 10% of the position each time a red TD9 appears, which not only avoids missing opportunities but also retains ammunition.

Cycle Resonance: The TD9 on the 15-minute chart combined with the RSI oversold on the 4-hour chart can significantly improve the win rate (Figure 5-7 multi-timeframe comparison).

Our TD strategy backtest shows that using only TD9 buy and sell signals on the BTC 4-hour timeframe can yield an annualized return of up to 142%, but the maximum drawdown can also reach 38%. However, when adding the ADX trend filter, the drawdown is immediately compressed to below 22%. This vividly illustrates that there are no perfect indicators, only perfect combinations.

Special Reminder Please temporarily set aside the TD indicator when encountering the following situations:

Before and after the announcement of major policies (such as ETF approval)

An abnormal large liquidation order occurred on the exchange.

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 ones who truly make money are not the most complex systems, but the traders who strictly adhere to discipline!

This article only represents the author's personal views and does not represent the position and views of this platform. This article is for information sharing only and does not constitute any investment advice to anyone.