Exhaustion Count Indicator Explained

The Exhaustion Count implements the counting logic popularized by Tom DeMark's Setup: it counts consecutive bars closing above (or below) the close four bars earlier. Runs that reach 8–9 have, statistically, spent much of their fuel — the count is a fatigue gauge for trends.

How It Works

• Each bar closing above the close 4 bars ago increments the buy-side count; a miss resets it.
• The sell-side count mirrors this below.
• Counts of 8–9 traditionally flag exhaustion windows.

How to Trade It

Two disciplined uses: stop adding to positions once the count reaches 7+, and arm countertrend logic only when a 9-count completes at a structural level. The count alone isn't an entry — it's the timer that tells you when reversal setups deserve attention.

Building It in Setup.Cash

Add Exhaustion Count in the strategy builder — the length input controls its sensitivity — and use its value in any entry, exit, or filter condition. You can also combine it with other tools in the Indicators Lab or via the AI indicator generator. Combine with Support/Resistance Zones for the structural half. For the full category overview, see the advanced momentum library guide.

Momentum signals are timing tools — combine them with a trend or regime filter and backtest the exact rules before going live.