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Pair Divergence Method

  • #201
  • Apr 14, 2009 9:01pm Apr 14, 2009 9:01pm
Quoting billbss
You're doing it right, according to the chart you posted.

They were at the point where both pairs turned down.

If they had been longs, the entrance would have been at the point when both pairs turned up.
Bill,

When you say, "turned up", or "turned down", do you mean to enter as soon as the line turns up, or do you mean when the underlying candle has closed, and the turned up line or turned down line cannot repaint?

Thanks
  • #202
  • Apr 14, 2009 9:03pm Apr 14, 2009 9:03pm
Quoting babatot
Bill,

When you say, "turned up", or "turned down", do you mean to enter as soon as the line turns up, or do you mean when the underlying candle has closed, and the turned up line or turned down line cannot repaint?

Thanks
On the close. Trade on closed signals only.
  • #203
  • Apr 14, 2009 9:40pm Apr 14, 2009 9:40pm
There's a long setting up for USD/CHF, if it still looks this way at 02:45 GMT.
Attached Image (click to enlarge)
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  • #204
  • Apr 15, 2009 3:27am Apr 15, 2009 3:27am
Quoting billbss
There's a long setting up for USD/CHF, if it still looks this way at 02:45 GMT.

This trade was a winner.
  • #205
  • Apr 15, 2009 5:03am Apr 15, 2009 5:03am
That's what (roughly) I had in mind, Bill.

It was a signal for Short, yet if you look at the picture "behind the scenes", going short at that point was not ideal.

On the other hand, with a good SL in place (as per your ATRx2 rule), the trend would eventually work out. But waiting for over 10 bars for the trade to work could be not to everybody's taste...
Attached Image (click to enlarge)
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Attached Image
One Chart is Worth Ten Thousand Words.
  • #206
  • Apr 15, 2009 5:07am Apr 15, 2009 5:07am
Quoting Forex007
That's what (roughly) I had in mind, Bill.

It was a signal for Short, yet if you look at the picture "behind the scenes", going short at that point was not ideal.
It wasn't a signal for a short. The USD/CHF is inverted on the overlay chart.
It was a signal for long U/CHF.
The trade made it's profit.
  • #207
  • Apr 15, 2009 5:22am Apr 15, 2009 5:22am
Quoting billbss
It wasn't a signal for a short. The USD/CHF is inverted on the overlay chart.
It was a signal for long U/CHF.
The trade made it's profit.
Sorry, Bill, forgot about that UF was mirrored. Thank you for the correction.

P.S. How did you know it was UF?
One Chart is Worth Ten Thousand Words.
  • #208
  • Apr 15, 2009 12:01pm Apr 15, 2009 12:01pm
Hi Bill,

Do you trade pair divergence which occured between two adjacent bars, as on the enclosed example? MANY THANKS!
Attached Image
One Chart is Worth Ten Thousand Words.
  • #209
  • Apr 15, 2009 2:28pm Apr 15, 2009 2:28pm
Bill, have a look at the 15Min today if you would ever be so kind.

Questions on charts.
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  • #210
  • Apr 15, 2009 2:54pm Apr 15, 2009 2:54pm
Bill,

Thank you for sharing this great system. I do have a question, up to how many bars/candles back do you look for the divergences to occur? If on a 15 minute time frame, is it OK to compare the initial divergence points up to 2 to 3 hours back or more, or does it need to be a closer period of time? Is there a maximum number of previous bars you consider to be too far back to take a trade? Thanks for your help!
  • #211
  • Apr 15, 2009 3:08pm Apr 15, 2009 3:08pm
Quoting Forex007
Hi Bill,

Do you trade pair divergence which occured between two adjacent bars, as on the enclosed example? MANY THANKS!
Hi 007,

I asked Billbss this question, so I'll share his answer to me, and try to save him a post (unless I've got it wrong, of course, in which case, Billbss will no doubt correct me).

No, this is not a trade. The peaks/valleys must occur on the same bar. If they are a bar late, the system waits for the next set up.

Hope this helps.

VBro
  • #212
  • Apr 15, 2009 3:19pm Apr 15, 2009 3:19pm
Quoting Jigsaw
Bill, have a look at the 15Min today if you would ever be so kind.

Questions on charts.

Hi Jigsaw,

I've asked Billbss pretty thoroughly about the rules, so I'll take a crack at sharing what I've learned from him (and I trust Billbss will correct me if I'm wrong).

1.) As I understand it, the example you have posted is not a proper set up, no trade here. The reason:

Peak #1 on Euro occurs @ 7:15 bar, while peak #1 on Swissy occurs @ 7:30 bar. The peaks must occur on the same bar for Billbss' system to trigger a trade.

2.) If the peaks/valleys do occur on the same bars, then the following bar must signal entry on both pairs at the same time.

So, if the second peak occurs at 7:30 bar (must be on both pairs), then the 7:45 bar must tick down (again, must be on both pairs) in order to trigger a trade. If this does not happen, the system rules do not allow a trade, and you must wait for the next set up.

Hope this helps,

VBro
  • #213
  • Apr 15, 2009 3:55pm Apr 15, 2009 3:55pm
Quoting vbro
Hi Jigsaw,

I've asked Billbss pretty thoroughly about the rules, so I'll take a crack at sharing what I've learned from him (and I trust Billbss will correct me if I'm wrong).

1.) As I understand it, the example you have posted is not a proper set up, no trade here....
It does, a lot.

Thankyou
  • #214
  • Apr 15, 2009 6:42pm Apr 15, 2009 6:42pm
Thank you Vbro, you gave good answers.
I've been slaving over my tax returns.
I haven't had much time for this.
  • #215
  • Apr 15, 2009 6:58pm Apr 15, 2009 6:58pm
Just took a set up on the USDCHF on IBFX and noticed that my SL looked further than it should be (I have a script to set it automatically). So I checked the spread and it was 8 pips!!! I'm looking at it now and have seen it go up to 9 and down to 7.

Is this a new thing for IBFX? There's no news and it's not a spike. It's been sitting there for the past 15 mins I've been watching it.

Lux

INSTANT UPDATE: Wouldn't you know it! As soon as I finished typing I checked again and it's fallen to 5 then 4. I'm going to have to watch these guys or maybe think about changing brokers.
MT4 EA, Indicator and Alert Coder Since 2006
  • #216
  • Apr 15, 2009 7:14pm Apr 15, 2009 7:14pm
Quoting luxinterior
Just took a set up on the USDCHF on IBFX and noticed that my SL looked further than it should be (I have a script to set it automatically). So I checked the spread and it was 8 pips!!! I'm looking at it now and have seen it go up to 9 and down to 7.

Is this a new thing for IBFX? There's no news and it's not a spike. It's been sitting there for the past 15 mins I've been watching it.

Lux



INSTANT UPDATE: Wouldn't you know it! As soon as I finished typing I checked again and it's fallen to 5 then 4. I'm going to have to watch these guys or maybe...
I've noticed IBFX doing that.
I've seen GBP/JPY as high as 20 pips.
I have no idea why.
  • #217
  • Apr 15, 2009 7:34pm Apr 15, 2009 7:34pm
Quoting luxinterior
Just took a set up on the USDCHF on IBFX and noticed that my SL looked further than it should be (I have a script to set it automatically). So I checked the spread and it was 8 pips!!! I'm looking at it now and have seen it go up to 9 and down to 7.

Is this a new thing for IBFX? There's no news and it's not a spike. It's been sitting there for the past 15 mins I've been watching it.

Lux

INSTANT UPDATE: Wouldn't you know it! As soon as I finished typing I checked again and it's fallen to 5 then 4. I'm going to have to watch these guys or maybe...
I missed that one, I hope you were able to manage it well. The screenshot enclosed for the interested ones.

Thanks for bringing up this method bill and thanks to lux for the indi!
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  • #218
  • Apr 15, 2009 8:11pm Apr 15, 2009 8:11pm
billbss,

Although I have my own method of trading, I am finding this method to be habit forming. I have followed this thread until today & have the method up & running on E/$ & USD/CHF on the 15M tf @ this time & it almost seems to good to be true how well it catches the moves. It seems the point to watch for is when both lines turn on the same candle......is that correct? Over the next week I'll keep this up & running taking some demo trades as I go & just might give this a try in the live mode. Have you thought about maybe writing a pdf for how you trade this? I hope that is not asking too much, but everything laid out in pdf format would be nice.

What do you see, if any the negatives to this method?

Are you using the 15M tf to enter trades from?

What other pairs would you advise to trade?

Thanks for sharing what really seem to be a great method.
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  • #219
  • Apr 15, 2009 8:34pm Apr 15, 2009 8:34pm
Quoting acetrader
billbss,

Although I have my own method of trading, I am finding this method to be habit forming....
I have thought about rewriting the first post. I've not only learned a few things since then, but I've learned what was not understood, the first time around and believe I can improve on it.

pdf? I don't have the super duper writable version of Acrobat that will let me write- only read. I have MSWORD, though.
I'll redo post #1 and well see what else is needed.



Quote
What do you see, if any the negatives to this method?
Right now, I don't see any real negatives. There is not enough action to please a lot of people. I do not believe it can be automated. It has to be looked at constantly. Other than that, I don't know of any negatives.

Quote
Are you using the 15M tf to enter trades from?
I am now, almost exclusively.

Quote
What other pairs would you advise to trade?
Good question. E/U - U/C is dynamite. I'm less enthusiastic about E/J - G/J.

Here's what I want to do this weekend:
Take all pair combos from the 1H correlation chart, which show >80%. Depending on how many there are, I may cut it off at 85%.
Manually backtest them for at least a month.
That should give 40 or so trades each.
I think that will tell us which pairs are worth trading.

Quote
Thanks for sharing what really seem to be a great method.
Your welcome.
  • #220
  • Apr 15, 2009 8:50pm Apr 15, 2009 8:50pm
billbss,

Tks for your response. I really don't see any negatives to this method either, but some may find the lack of action as a negative.

I too am using only the 15M tf.

It will be interesting to see what pairs you come up with over the weekend.

Not a good one for automation, but still a great method.

If you would just repost everything about this method & what you have learned since its inception that would be great. All the rules, do's & don't in one post would do it.

Tks again for sharing & any updates forthcoming.
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