> For the complete documentation index, see [llms.txt](https://trading-alpha.gitbook.io/trading-alpha-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://trading-alpha.gitbook.io/trading-alpha-docs/htf-and-ltf-suite/td-8-and-9.md).

# TD 8 and 9

The 8/9 Indicators are designed to help identify potentially overbought and oversold market conditions. These signals are generated by counting consecutive candles moving in the same direction and printing signals once extended directional movement has occurred.

When the market experiences:

* **8 consecutive candles** moving in the same direction, an **8 signal** is generated
* **9 consecutive candles** moving in the same direction, a **9 signal** is generated

These signals are intended to highlight areas where price action may be becoming stretched and where the probability of a short-term reversal, pause, or momentum shift may begin increasing.

#### Difference Between 8’s and 9’s

**TD8 Signals**

The TD8 signal appears first and indicates that the asset may be entering an overbought or oversold condition. These setups can represent moderate-probability areas for potential reversals or temporary trend exhaustion.

**TD9 Signals**

The TD9 signal is less common and represents a more extreme level of overbought or oversold conditions. Because of this, TD9 setups are generally considered stronger and higher-probability reversal areas when evaluating market exhaustion purely from an overbought/oversold perspective.

#### Color Coordination

* **Green 8’s and 9’s** indicate bullish oversold conditions, suggesting that downside momentum may be becoming exhausted and that a bounce or reversal to the upside could develop.
* **Red 8’s and 9’s** indicate bearish overbought conditions, suggesting that upside momentum may be becoming exhausted and that a pullback or reversal to the downside could occur.

As with all Trading Alpha tools, the 8/9 Indicators are most effective when used alongside trend analysis, confirmation signals, and additional confluence from the broader Trading Alpha system.

| Signal    | Bullish or Bearish | Definition                          |
| --------- | ------------------ | ----------------------------------- |
| Green 8's | Bullish            | Oversold, potential reversal        |
| Green 9's | Bullish            | VERY oversold, potential reversal   |
| Red 8's   | Bearish            | Overbought, potential reversal      |
| Red 9's   | Bearish            | VERY overbought, potential reversal |

### Confirmation:

This system can be used alone, or in conjunction with the other HTF/LTF signals to give better clarity on the potential move such as the: 

* Base color Trend & Momentum candles
* Volatility Squeeze breakout system

### Example:

1. Green 8/9 system indicated the breakout/oversold level
2. Red 8/9 system indicated the reversal level for take profit
3. 35% trade based off just 8/9 system

![](/files/-Mh--ODLvVQFEbkJDp51)


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