TD Setup

The first half of DeMark's TD Sequential. Counts consecutive bars whose close is less-than (buy setup) or greater-than (sell setup) the close lookback bars earlier. A completed buy setup is a streak of 9 (classic target); a completed sell setup is the mirror. Emits a signed run length — positive for buy, negative for sell — making it easy to read both directions from one scalar.

Quick reference

Item	Value
Family	DeMark
Input type	Candle (uses close)
Output type	f64 — signed running count
Output range	[-target, +target] (capped at completion)
Default parameters	lookback = 4, target = 9
Warmup period	lookback + 1
Interpretation	+9 = completed buy setup; −9 = completed sell setup

Formula

buy_setup: count consecutive bars with close[i] <  close[i - lookback]
sell_setup: count consecutive bars with close[i] >  close[i - lookback]

Streaks reset to zero as soon as the condition fails, or on
equality (close[i] == close[i - lookback]).

Output:
  + buy_count   if buy_count > 0
  - sell_count  if sell_count > 0
  0             otherwise

The count saturates at `target` once the setup completes; subsequent
bars satisfying the condition continue to report `target` until the
streak breaks.

See crates/wickra-core/src/indicators/td_setup.rs.

Parameters

Name	Type	Default	Constraint	Description
lookback	usize	4	> 0	Bars back the close is compared against. DeMark's canonical value.
target	usize	9	> 0	The "completed" setup count (DeMark's canonical 9).

TdSetup::new(lookback, target) returns Error::PeriodZero for any zero argument. TdSetup::classic() returns the (4, 9) factory.

Inputs / Outputs

Indicator<Input = Candle, Output = f64>. The signed value lets a single scalar carry both directions. Python: TdSetup(lookback, target).batch(close) returns a 1-D np.ndarray with NaN for the warmup prefix. Node: same shape; update(candle) returns number | null.

Warmup

warmup_period() == lookback + 1. The close buffer needs lookback bars; the first comparison happens on bar lookback + 1.

Edge cases

• Equal closes. Both buy and sell streaks reset to zero on equality with the lookback close (close[i] == close[i - lookback]).
• Only one streak active per bar. Buy and sell conditions are mutually exclusive — at most one is non-zero.
• Saturation at target. Once a streak reaches target it stays at target until the condition breaks.
• Reset. reset() clears the close buffer and both streak counts.

Examples

Rust

use wickra::{BatchExt, Candle, Indicator, TdSetup};

fn main() -> Result<(), Box<dyn std::error::Error>> {
    let closes: Vec<f64> = (1..=20).map(f64::from).collect();
    let candles: Vec<Candle> = closes
        .iter()
        .enumerate()
        .map(|(i, &c)| Candle::new(c, c + 0.5, c - 0.5, c, 1.0, i as i64).unwrap())
        .collect();
    let mut td = TdSetup::classic();
    let out = td.batch(&candles);
    println!("row 19 = {:?}", out[19]); // monotone ramp → sell streak grows
    Ok(())
}

Python

import numpy as np
import wickra as ta

# Down trend → buy setup count grows
close = 100 - np.arange(15, dtype=float)
td = ta.TdSetup(4, 9)
out = td.batch(close + 0.5, close - 0.5, close)  # h, l, c
print('warmup:', td.warmup_period())  # 5
print('last:', out[-1])  # should be 9 (capped buy setup)

Node

const wickra = require('wickra');
const td = new wickra.TdSetup(4, 9);
const close = Array.from({ length: 15 }, (_, i) => 100 - i);
// h, l, c arrays
const out = td.batch(close.map(c => c + 0.5), close.map(c => c - 0.5), close);
console.log('last:', out[out.length - 1]);

Streaming

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

let mut td = TdSetup::classic();
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 == 9.0 { /* completed buy setup */ }
        if v == -9.0 { /* completed sell setup */ }
    }
}

Interpretation

• Setup 9. DeMark's "first warning" of momentum exhaustion. Setup 9 alone is tradable as a short-term reversal — though not with the conviction of a full TD Sequential (Setup 9 + Countdown 13).
• Setup perfection. DeMark's "perfected setup" requires the high (or low) of bars 8 or 9 to compare correctly against earlier bars in the run. Wickra emits the raw count; perfection must be checked externally.
• Pairs with TdLines. A completed setup defines TDST support / resistance (see TdLines) — break of that level invalidates the setup's reversal thesis.

Common pitfalls

• Treating Setup 5 as actionable. DeMark's signals require the full target count. Mid-setup counts are informational.
• Resetting on session boundaries. TD Setup is bar-stream agnostic — do not reset on session boundaries; the rolling close window naturally handles overnight gaps.
• Mixing lookback values. Setting lookback = 2 is a non-DeMark variation; the canonical methodology requires 4.

References

• Tom DeMark, The New Science of Technical Analysis (1994) — original TD Setup formulation.
• Tom DeMark, DeMark Indicators (2008, with Jason Perl) — refined parameter guidance.

See also

• TdSequential — pairs Setup with Countdown.
• TdCountdown — standalone Countdown.
• TdLines — TDST support / resistance.
• TdRiskLevel — protective-stop levels.
• Indicators-Overview — full taxonomy.