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Pair Divergence Method

  • #381
  • Jul 14, 2009 6:07pm Jul 14, 2009 6:07pm
Quoting giraia_br
i can understand this for the first setup (red) for the second (aqua)all i can see if the previous top is lower on AJ and higher on UJ.
I see what you're saying. I didn't understand "agua".

Yes, that is a valid set-up.
  • #382
  • Jul 14, 2009 10:22pm Jul 14, 2009 10:22pm
Quoting billbss
I see what you're saying. I didn't understand "agua".

Yes, that is a valid set-up.
ok. Thanks.
  • #383
  • Jul 17, 2009 8:01am Jul 17, 2009 8:01am
billbss, if i understood correctly, you wait the first bar that closes in the direction of the move...right?


thanks in advance.
  • #384
  • Jul 17, 2009 8:17am Jul 17, 2009 8:17am
Quoting giraia_br
billbss, if i understood correctly, you wait the first bar that closes in the direction of the move...right?


thanks in advance.
Yes. The bar has to close in the direction of the move, on both pairs.
  • #385
  • Jul 18, 2009 2:32pm Jul 18, 2009 2:32pm
1 this setup is valid?
2 the enter should be at the open of the bar of 19:15?

http://img504.imageshack.us/img504/656/aunu.gif

bars:

http://img83.imageshack.us/img83/8316/aunu2.gif


thanks in advance.
  • #386
  • Jul 21, 2009 12:09pm Jul 21, 2009 12:09pm
There was a signal on Eurusd on the H4 (against USDCHF). But i still a litttle confused with the correct time to enter.
  • #387
  • Jul 24, 2009 6:05pm Jul 24, 2009 6:05pm
I want to do a correlation study with a broker other than FXCM, preferably from a live account. Could someone please post some history files from another broker:

Metrader:history:real data folder:EURUSD1.hst
Metrader:history:real data folder:USDCHF1.hst
  • #388
  • Jul 26, 2009 1:20pm Jul 26, 2009 1:20pm
Here's data from fxpro demo account
Attached File(s)
File Type: zip USDCHF1.zip   72 KB | 548 downloads
File Type: zip EURUSD1.zip   1.7 MB | 595 downloads
  • #389
  • Aug 17, 2009 3:41pm Aug 17, 2009 3:41pm
there are many many setups i am and feel the need to came here and ask Bill if this is a valid setup.

for example this setup with CHFJPY making a higher low than EURJPY is valid or the higher low with the vertical yellow line invalidates it?

http://img35.imageshack.us/img35/7704/cjej.gif


i will be gratefull if you have time to comment this trade.
  • #390
  • Edited 9:07pm Aug 18, 2009 8:27pm | Edited 9:07pm
i opened a journal

http://www.forexfactory.com/showthre...=1#post2966111
  • #391
  • Aug 20, 2009 2:23pm Aug 20, 2009 2:23pm
I just went through the thread. I am still confused concerning the stop loss and profit levels. Somebody was using 100 pips for both on 15 min charts with great success according to his results. Is 2XATR still in use?

Thanks and regards.

Chamane
  • #392
  • Sep 4, 2009 1:34pm Sep 4, 2009 1:34pm
Chamane,
I'm not entirely sure. From what I've seen the ATR14X2 seems to work OK. 100 pips is quite a move, but does allow a lot of room for volitility. It would probably be more reasonable for GBPJPY correlated pairs...but if it works, by all means.

To All,
I've developed an EA for this strategy!!! And they said it couldn't be done. It still needs some work, but mostly just to add more configurable properties and I need to do some forward testing to verify everything since automated backtesting doesn't work well when dealing with two pairs (the market info isn't available for the second pair).

I've attached a screenshot of a couple recent divergences my EA has identified.

I'm not ready to post it yet, but stay tuned. The arrows don't actully signify the entry point, but rather just show the direction you will go after candle close confirmation (the EA will wait for confimation before entring a trade). Also, for a mirrored pair, the arrow is also mirrored, but the EA (if allowed to trade) will enter in the correct direction.

I also want to add the ability to email/text message signals since I know a lot of you will want to trade manually, but would like an EA for signals only.

I'll try to get this out soon so hopefully some of you will help identify and issues or novel additional features.

Please let me know if anyone is still paying attention to this thread and if you are interest.

Oh, and HatTip to luxinterior as I used a modified version of his mirroring algorithm for the indicator my EA uses.
Attached Image (click to enlarge)
Click to Enlarge Name: Correlating Pairs EA.jpg Size: 246 KB
  • #393
  • Sep 4, 2009 5:07pm Sep 4, 2009 5:07pm
Quoting giraia_br
there are many many setups i am and feel the need to came here and ask Bill if this is a valid setup.

for example this setup with CHFJPY making a higher low than EURJPY is valid or the higher low with the vertical yellow line invalidates it?

http://img35.imageshack.us/img35/7704/cjej.gif


i will be gratefull if you have time to comment this trade.
I just want to note that my EA would not have taken or signaled this setup due to the spikes in between the divergence. My understanding is this strategy is based on a "single wave" divergence. In other words, the 2 peaks/valleys must be adjacent to each other. I might be pursuaded to include the ability to look for divergence x number of peaks/valleys back (or one of you can when/if I release the source), but it will be tricky.

Anyway, I'd love to hear feedback/interest before I modify this to be more end-user friendly. Otherwise I'll just happily use it myself as is.

Happy Trading.
  • #394
  • Sep 4, 2009 5:36pm Sep 4, 2009 5:36pm
Quoting billbss
Here are a couple more examples.

In the first chart, GBP/JPY is making a new High (4) and EUR/JPY (2) is not.
We will be going short on the EUR/JPY.
We wait until both pairs turn down together. That is where the arrow is. We go short EUR/JPY.
We set out SL at 2x ATR 14. We set out TP the same.

In the second chart EUR/JPY makes a new Low (2) and GBP/JPY does not.
We will buy the GBP/JPY when both pairs turn up.
This happens at the arrow.

We go Long GBP/JPY. The SL and TP are as described above.
Bill,
I have a quick question if you would be so kind to answer. In your example on page 2 (see below), the first image, where the new high is made it is a clean wave (3 & 4), however where the new high is not made (1 & 2) there is a mini wave between 1 & 2. Is the "clean wave" you've mentioned only applicable to the pair which makes the lower low or higher high and not necessary for the pair which fails to correlate (diverts). Also I'm noticing that peaks 1 and 3 are not recent highs as both pairs seem to be slightly trending downwards. Is it important or desirable that the first High or Low be an actual recent high or low or is it just divergence in general which should be considered.

Thanks in advance for your help.

http://cdn.forexfactory.com/attachme...1&d=1238384060

-LucidObscurity
  • #395
  • Sep 4, 2009 7:40pm Sep 4, 2009 7:40pm
Quoting LucidObscuri
Bill,...

That example was taken from early in the thread.
I later defined rules that would have eliminated 1&2, because of the extra wave.

I did this, not because the wave shown as 1&2 would not work, but to try to make identifying these waves and divergences mechanical and less subjective.

To sum up, The first chart with the wave marked 1&2 would not qualify.
  • #396
  • Sep 4, 2009 7:48pm Sep 4, 2009 7:48pm
Quoting billbss
That example was taken from early in the thread.
I later defined rules that would have eliminated 1&2, because of the extra wave.

I did this, not because the wave shown as 1&2 would not work, but to try to make identifying these waves and divergences mechanical and less subjective.

To sum up, The first chart with the wave marked 1&2 would not qualify.

Thanks Bill, that really helps. My other question I've answered for myself since you were quite clear in that the "new high" or "new low" only needs to be acheived by one pair (the one not to be traded). I've adjusted my EA accordingly. The EA already does not consider non-adjacent Peaks/Valleys. I'll be posting it shortly (probably this weekend). Hopefully you will find it useful as a signal or at least a mechanism to draw a few helpful lines and arrows on your chart.

Thanks again!
  • #397
  • Sep 4, 2009 8:29pm Sep 4, 2009 8:29pm
Quoting LucidObscuri
Thanks Bill, that really helps. My other question I've answered for myself since you were quite clear in that the "new high" or "new low" only needs to be acheived by one pair (the one not to be traded). I've adjusted my EA accordingly. The EA already does not consider non-adjacent Peaks/Valleys. I'll be posting it shortly (probably this weekend). Hopefully you will find it useful as a signal or at least a mechanism to draw a few helpful lines and arrows on your chart.

Thanks again!
Thank you for the work you are putting in on this.
It is appreciated.
  • #398
  • Sep 4, 2009 9:12pm Sep 4, 2009 9:12pm
Interested in ea. Been following greamliners thread with great intrest and we r trying to come up with something similar
  • #399
  • Sep 4, 2009 10:33pm Sep 4, 2009 10:33pm
Bill,

I am pleased to see a revival of interest in your endeavor. I will follow with great interest.

Good Trading!
  • #400
  • Sep 5, 2009 2:38am Sep 5, 2009 2:38am
Hi all
Personnally I'm using a different way to trade divergences with correlated pairs.
On my chart, I put the linear price action for commodity and the indy Price Difference with both correlated pairs .
For example with EURCHF, I'm using Price Difference with USDCHF and EURUSD.
You can see this indy is the "mirror" of our pair.
But sometimes there is a nice divergence on any TF.
In 5M, we can use that as a scalping technique.
These divergences unfortunately are rare but when they occur, it's a strong signal.
Two following examples.....
Attached Image(s) (click to enlarge)
Click to Enlarge Name: EURCHF.jpg Size: 110 KB
Click to Enlarge Name: EURGBP.jpg Size: 131 KB
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