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Hidden divergence

  • #3,041
  • Jan 30, 2020 6:32am Jan 30, 2020 6:32am
AUDUSD Monthly HD pattern.
Attached Image (click to enlarge)
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  • #3,042
  • Jan 30, 2020 7:18am Jan 30, 2020 7:18am
CHFJPY. Hd pattern on the Daily chart and possible entry on the 4HR.
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  • #3,043
  • Jan 31, 2020 5:08am Jan 31, 2020 5:08am
I also see many possible HD and Normal Divergence on some majors ...
"The market doesn't care about you, stop hoping it will." Dirk
  • #3,044
  • Jan 31, 2020 9:58am Jan 31, 2020 9:58am
Did someone calc win/lose ratio for any divergence?
  • #3,045
  • Jan 31, 2020 11:47am Jan 31, 2020 11:47am
Quoting IvanovSoft
Did someone calc win/lose ratio for any divergence?
chamane did some for last year.

https://www.forexfactory.com/showthr...0#post12682770
  • #3,046
  • Jan 31, 2020 1:11pm Jan 31, 2020 1:11pm
Quoting ROEye
{quote} chamane did some for last year. https://www.forexfactory.com/showthr...0#post12682770
Thank you for reply. Overall currencies 18 wins - 6 losses - 6 breakevens - obviously that is not representative selection. What I am looking for is backtesting results, with hundreds divergence.
  • #3,047
  • Jan 31, 2020 5:35pm Jan 31, 2020 5:35pm
Quoting IvanovSoft
{quote} Thank you for reply. Overall currencies 18 wins - 6 losses - 6 breakevens - obviously that is not representative selection. What I am looking for is backtesting results, with hundreds divergence.
IvanovSoft,

The only one that I know of who analyzed all sorts of patterns including divergence is Tom Bulkowski. Many others such as Alexander Elder, Perry Koffman and George Lane had good words for the pattern, but never heard them talking about the frequency of success. You can read Bulkowski's stuff here. I think he only analyzed regular divergence, not hidden. But in my opinion, the success will depend greatly on how you manage the trade. Hidden divergence gives an edge. I gave an idea for HD patterns found on Monthly charts for a whole year using personal rules. Using a different RR will give something different. It is best to backtest ourselves with rules we are likely to use. I often mention a success rate between 66% and 75%, but it depends on the trader himself.
  • #3,048
  • Feb 1, 2020 1:18am Feb 1, 2020 1:18am
Quoting chamane
{quote} IvanovSoft, The only one that I know of who analyzed all sorts of patterns including divergence is Tom Bulkowski. Many others such as Alexander Elder, Perry Koffman and George Lane had good words for the pattern, but never heard them talking about the frequency of success. You can read Bulkowski's stuff here. I think he only analyzed regular divergence, not hidden. But in my opinion, the success will depend greatly on how you manage the trade. Hidden divergence gives an edge. I gave...
Thank you for your finding, that is already something. However there are couple issues:
1. He did a lot of optimizations, removed a lot of samples, to find profitable.
2. He did not specify the definition of profitable and lose sample. Quote: "the stocks gained an average of 0.7%" - before how many points fail?
  • #3,049
  • Feb 1, 2020 10:38am Feb 1, 2020 10:38am
Some of the trading opportunities with currency pairs using the Hidden divergence pattern on the 4 HR chart during this past week.
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Click to Enlarge Name: CADJPY.png Size: 38 KB
Click to Enlarge Name: GBPAUD.png Size: 38 KB
Click to Enlarge Name: GBPJPY.png Size: 40 KB
Click to Enlarge Name: NZDCHF.png Size: 37 KB
Click to Enlarge Name: NZDJPY.png Size: 37 KB
  • #3,050
  • Feb 1, 2020 10:39am Feb 1, 2020 10:39am
And with other instruments.
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  • #3,051
  • Feb 1, 2020 12:42pm Feb 1, 2020 12:42pm
Quoting chamane
Some of the trading opportunities ...
Are these still opportunities or complete patterns? I mean where is your TP/SL? Did you mark only last divergence or all what you could find on these charts (because I can find more)?
  • #3,052
  • Feb 1, 2020 1:59pm Feb 1, 2020 1:59pm
Quoting IvanovSoft
{quote} Are these still opportunities or complete patterns? I mean where is your TP/SL? Did you mark only last divergence or all what you could find on these charts (because I can find more)?
It is "chamane's manual" somewhere here, check out attached files. You will find a lot of answers.
  • #3,053
  • Feb 1, 2020 2:47pm Feb 1, 2020 2:47pm
Quoting vitall
{quote} It is "chamane's manual" somewhere here, check out attached files. You will find a lot of answers.
You know I am new here, like others. And this is just impossible to review 153 pages of comments and 2263 attachments. I just too skeptic about any divergence. It should be about 48% win/lose ratio like any other indicator. Of course on screenshot people find what they want, but once you run strategy in backtesting - it finds much more patterns, so win/lose ratio is much worse than on screenshots.
That is why I am asking chamane - do you have any EA to backtest your strategy or you just continue post nice screenshots here?
  • #3,054
  • Feb 1, 2020 6:57pm Feb 1, 2020 6:57pm
Quoting IvanovSoft
{quote} You know I am new here, like others. And this is just impossible to review 153 pages of comments and 2263 attachments.
I think you should reconsider this. The time it would take is nothing compared to the time it has taken chamane to research and continually post charts and comments over the past five or so years. You only have to read her posts and charts after all.
Good Trading
  • #3,055
  • Feb 1, 2020 7:59pm Feb 1, 2020 7:59pm
Quoting IvanovSoft
{quote} You know I am new here, like others. And this is just impossible to review 153 pages of comments and 2263 attachments. I just too skeptic about any divergence. It should be about 48% win/lose ratio like any other indicator. Of course on screenshot people find what they want, but once you run strategy in backtesting - it finds much more patterns, so win/lose ratio is much worse than on screenshots. That is why I am asking chamane - do you have any EA to backtest your strategy or you just continue post nice screenshots here?
IvanovSoft,

I think that the best way to backtest hidden divergence is to do it manually. There are few divergence indicators out there, but I prefer to select myself the cases I will trade. I prefer situations when there is a clear trend on the main chart and the next higher chart. I also check the distance between highs and lows and try to avoid noise between peaks. All those criteria among others cannot be detected by an indicator. Furthermore, the way you manage your money will have an impact on the rate of success. I use the last swing high/low as the stop loss level and I cash in when the profit reaches the amount of risk (RR=1:1). The ratio can be different, it is up to the trader.

I post screenshots because it is part of a personal routine to try to improve my trading. I think it also shows other traders how interesting the pattern is because of the numerous opportunities there are during a week. I hope to benefit from ideas and comments from other traders as I did so far starting with Dany first posts. He uses his own technique with OSMA, trendline and Ichimoku and I added a personal touch with MACD and the cost averaging approach. I am not saying it is the best, but it suits my personal style. So no, I don't have an EA for backtesting and I doubt it would be possible to create one for the way I trade.

I know it is kind of hard to read all posts of a long thread. You can have a look at a small note (see post no. 2532) I wrote to explain my approach of trading Hidden Divergence patterns. Hope it will be useful. You can also review only the first pages of this thread showing Dany's technique.
  • #3,056
  • Feb 1, 2020 8:37pm Feb 1, 2020 8:37pm
Here is a trade I took earlier this week. A Hidden Divergence pattern on the Daily chart with a clear uptrend and an entry on the 4HR. The point of entry can also be used as the start of a Trading Zone (aqua rectangle) for entries on the 30 min. So far, there were 3 entry points, two winning ones and the last one still developing.
Attached Image (click to enlarge)
Click to Enlarge Name: Divergence.png Size: 54 KB
  • #3,057
  • Feb 1, 2020 9:51pm Feb 1, 2020 9:51pm
Quoting chamane
Some of the trading opportunities with currency pairs using the Hidden divergence pattern on the 4 HR chart during this past week.
Looking at the charts you are kindly posting up on the weekend, I decided to check some back against my charts. I had been using the standard MT4 MACD and noticed it's not the same as ones you use. (Took me a while!)

I was expecting all the MACD histograms to be the same with other MACD indie different in some aspects/features. Also wanting to use standard MT provided indie as I'm looking to transition to MT5. Anyway here is an A/J to show the difference.

Attached Image (click to enlarge)
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I may do better now I've worked that out!
Good Trading
  • #3,058
  • Feb 1, 2020 10:38pm Feb 1, 2020 10:38pm
Quoting aud
{quote} Looking at the charts you are kindly posting up on the weekend, I decided to check some back against my charts. I had been using the standard MT4 MACD and noticed it's not the same as ones you use. (Took me a while!) I was expecting all the MACD histograms to be the same with other MACD indie different in some aspects/features. Also wanting to use standard MT provided indie as I'm looking to transition to MT5. Anyway here is an A/J to show the difference. {image} I may do better now I've worked that out!
There seems to be a slight difference between the indicators, but I am convinced it is not enough to change the analysis significantly, especially if you also use an 8 period stochastic to support your decisions.
  • #3,059
  • Feb 2, 2020 12:36am Feb 2, 2020 12:36am
Quoting chamane
{quote} (see post no. 2532) I wrote to explain my approach of trading Hidden Divergence patterns.
Thanks! That is what I looked for. Now I am taking challenge to code this approach myself, because it is the best way for me to check any strategy.
  • #3,060
  • Feb 2, 2020 5:15am Feb 2, 2020 5:15am
By the way: we are still in the TZ here:
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