TD Differential

Tom DeMark's 2-bar momentum-divergence reversal pattern. Flags an exhaustion-and-reversal candle whose buying or selling pressure has shifted from the prior bar. Combines a direction filter (current vs previous close), a buying-pressure check (close − low), and a selling-pressure check (high − close).

Quick reference

Item	Value
Family	DeMark
Input type	Candle (uses high, low, close)
Output type	f64 — +1.0 buy, -1.0 sell, 0.0 no signal
Output range	{-1.0, 0.0, +1.0}
Default parameters	none — TdDifferential::new()
Warmup period	2
Interpretation	Single-bar reversal signal; momentum shift detector

Formula

buying_now   = close[i] - low[i]
buying_prev  = close[i-1] - low[i-1]
selling_now  = high[i] - close[i]
selling_prev = high[i-1] - close[i-1]

Buy signal (+1.0) on bar i when:

1. close[i]   <  close[i - 1]              (down day)
2. buying_now >  buying_prev                (more buying pressure than the prior bar)
3. selling_now <  selling_prev              (less selling pressure than the prior bar)

Sell signal (-1.0) on bar i when:

1. close[i]   >  close[i - 1]              (up day)
2. selling_now >  selling_prev              (more selling pressure)
3. buying_now  <  buying_prev               (less buying pressure)

Otherwise the output is 0.0. See crates/wickra-core/src/indicators/td_differential.rs.

Parameters

None — TdDifferential::new() takes no arguments.

Inputs / Outputs

Indicator<Input = Candle, Output = f64>. Python: TdDifferential().batch(high, low, close) returns a 1-D np.ndarray (first bar is NaN). Node: same shape; update(candle) returns number | null (only first bar null).

Warmup

warmup_period() == 2. The two-bar lookback means the indicator emits its first value on the second input candle.

Edge cases

• No signal. Most bars emit 0.0 — both buy and sell conditions are strict (three inequalities each).
• Direction conflict. A bar that's both up and down at the same time is impossible; the strict close comparison filters noise cleanly.
• NaN / infinity. Rejected by Candle::new upstream.
• Reset. Clears the previous-bar cache.

Examples

Rust

use wickra::{Candle, Indicator, TdDifferential};

fn main() -> Result<(), Box<dyn std::error::Error>> {
    let mut td = TdDifferential::new();
    // Bar 1: down day with weak selling
    let c1 = Candle::new(100.0, 105.0, 99.0, 100.0, 1.0, 0)?;
    let c2 = Candle::new(99.0, 104.0, 95.0, 99.5, 1.0, 1)?;
    // ... evaluate
    let _ = td.update(c1);
    let v = td.update(c2);
    println!("signal = {v:?}");
    Ok(())
}

Python

import numpy as np
import wickra as ta

h = np.array([105.0, 104.0])
l = np.array([ 99.0,  95.0])
c = np.array([100.0,  99.5])

td = ta.TdDifferential()
print(td.batch(h, l, c))  # [NaN, ±1 or 0]

Node

const wickra = require('wickra');
const td = new wickra.TdDifferential();
console.log(td.batch([105, 104], [99, 95], [100, 99.5]));

Streaming

use wickra::{Candle, Indicator, TdDifferential};

let mut td = TdDifferential::new();
let candle_stream: Vec<wickra::Candle> = Vec::new(); // your live OHLCV candle feed
for bar in candle_stream {
    if let Some(v) = td.update(bar) {
        if v > 0.0 { /* buy reversal pattern */ }
        if v < 0.0 { /* sell reversal pattern */ }
    }
}

Interpretation

• Single-bar exhaustion. TD Differential flags one bar where the price made a new close-direction extreme but the pressure distribution has shifted — classic exhaustion-bar pattern.
• Pair with Setup / Sequential. TD Differential signals at bar level; pair with Setup or Countdown progress to filter noise and only act when both layers agree.
• Discrete output. The trinary {-1, 0, +1} output is easy to feed into rule-based systems; no thresholds to tune.

Common pitfalls

• Treating every signal as actionable. TD Differential signals appear on individual bars and many are false positives. Use as a filter, not a primary trigger.
• Forgetting the direction filter. The first rule (close < prev close for buys) is the direction filter; without it the pressure tests would fire on any momentum-shift bar.
• Ignoring DeMark's variants. DeMark also published TD Differential 2-bar and TD Differential 3-bar variants with slightly different thresholds; this is the base 2-bar variant.

References

• Tom DeMark, The New Science of Technical Analysis (1994) — TD Differential.

See also

• TdSetup — wider momentum-exhaustion signal.
• TdSequential — full Setup + Countdown.
• TdOpen — gap-and-fade reversal sibling.
• TdPressure — volume-weighted pressure oscillator.
• Indicators-Overview — full taxonomy.