Thomas DeMark's Approach, Part III: TD Price Projections

Once a break of a TD-line has passed one of DeMark’s qualifiers (see Part II), the trader needs a target: how far is price likely to travel after the breakout? DeMark offered three methods, called TD price projectors. They all measure how far price moved away from the TD-line before the breakout and project that distance from the breakout point.

TD price projector 1: the simplest

The first projector is the easiest to calculate but the least precise.

• Upside breakout: find the lowest low below the downward TD-line. Measure the distance from that low up to the TD-line directly above it. Add this distance to the price where the line was broken.
• Downside breakout: find the highest high above the upward TD-line. Measure the distance from that high down to the TD-line directly below it. Subtract this distance from the breakout price.

Fig. 1. TD price projector 1.

TD price projector 2: the bar with the extreme close

The second projector works the same way, but the measuring point is chosen differently:

• Upside breakout: find the bar with the lowest close below the TD-line, and measure from that bar’s low to the TD-line.
• Downside breakout: find the bar with the highest close above the TD-line, and measure from that bar’s high to the TD-line.

The distance is then added to (or subtracted from) the breakout price. Projectors 1 and 2 often give the same target, because the lowest low and the lowest close usually fall on the same bar.

Fig. 2. TD price projector 2.

TD price projector 3: the most conservative

The third projector measures from a close rather than an extreme:

• Upside breakout: take the bar that made the lowest low below the TD-line, and measure from its close to the TD-line.
• Downside breakout: take the bar that made the highest high above the TD-line, and measure from its close to the TD-line.

Because it measures from a close rather than the low (or high) of the same bar, the distance is shorter than projector 1’s, and the target is usually the nearest of the three.

Fig. 3. TD price projector 3.

When targets are not reached

Projections are estimates, not promises. Two things usually stop price short of its target:

• An opposite signal. Price breaks a TD-line in the other direction. The new signal replaces the old one, and the old target no longer applies.
• A false breakout. This usually shows on the next bar, when price closes back on the wrong side of the line it broke.

In Part IV we turn to DeMark’s indicator for measuring the strength of a trend.

Part 3 of 5 in the Thomas DeMark’s Approach series. Previous: Part II: Breakout Qualifiers. Next: Part IV: The DeMarker Indicator.

Screen for it on MarketInOut

To find fresh breakouts to project targets for, screen for qualified TD-Line breaks. For example, NYSE and Nasdaq stocks that broke above a level 1 TD-Line and passed qualifier 3:

exch(nyse,nasdaq) and type(stock) and td_ubm1q3

Rewritten in October 2026 from an article in MarketInOut’s original article library.