TD Combo

What is TD Combo?

TD Combo is one of Tom DeMark's exhaustion count studies. Rather than transforming price into an oscillator line, it counts qualifying bars as a trend matures and prints those counts on the chart, flagging the point where the move has, by its rules, used up the fuel that produced it. It is a sibling of TD Sequential, pursuing the same goal through a different and generally more demanding set of counting conditions.

The philosophy separates it from mainstream momentum tools. Indicators such as MACD or ROC confirm that a turn has begun; DeMark's counts attempt to anticipate the turn by identifying exhaustion as it completes. A finished count is therefore a warning that continuation requires fresh energy, not proof that a reversal has started.

In oscillator terms, a completed count plays a role similar to a deeply overbought or oversold reading paired with a regular divergence: it marks conditions for a reversal without timestamping one. DeMark practice attaches risk levels to each signal that define where the exhaustion case is wrong.

How to read TD count annotations

On licensed platforms, TD Combo prints numbers above or below price bars, and the annotations can be read even though the rules generating them are not reproduced here.

1. 1Locate the active count: ascending numbers beneath a decline or above an advance show the study tracking a maturing trend.
2. 2Watch for the completion marker: platforms flag a finished count distinctly, and that flag, not any individual number, is the exhaustion signal.
3. 3Find the associated risk level: DeMark studies attach a price at which the signal is considered violated; note it before acting.
4. 4Then consult price: practitioners look for confirming bar behavior after completion, because a count can complete while the trend keeps going.

How traders use it

• As a stop-chasing flag: a completed count late in an advance tells trend riders to stop adding, tighten stops, or take partial profits, even if they never trade against the trend.
• Contrarian confluence: fade specialists want a completed count to coincide with independent evidence, such as an extreme or a divergence on RSI, before positioning for a turn.
• Cross-timeframe framing: a completion on a weekly chart defines a zone in which daily-timeframe reversal setups get taken more seriously.
• Risk discipline: the risk level attached to a signal provides an objective invalidation point; a clean violation is read as the exhaustion case failing rather than a reason to average in.