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Pair Divergence Method

  • #461
  • Sep 11, 2009 7:44pm Sep 11, 2009 7:44pm
Quoting brucech
Thanks for the great work that you have been doing.
I have placed the new overlay on the chart but get nothing showing.
If I put the previous overlay on the chart it shows

What could be the problem.

Thanks.

Bruce
If there is a problem with the ability to retrieve data for the SubSymbol then the indicator will only draw from the right side of the chart as new data comes in (as long as new data for that symbol is coming in from another chart). Make sure you have historical data.
  • #462
  • Sep 11, 2009 8:18pm Sep 11, 2009 8:18pm
Quoting LucidObscuri
If there is a problem with the ability to retrieve data for the SubSymbol then the indicator will only draw from the right side of the chart as new data comes in (as long as new data for that symbol is coming in from another chart). Make sure you have historical data.
Hi Lucid,
Thank you!
My overlay isn't working , either.
I have plenty of historical data.
I'm aware of the postscript and that isn't the problem.
  • #463
  • Sep 11, 2009 9:03pm Sep 11, 2009 9:03pm
Quoting billbss
Hi Lucid,
Thank you!
My overlay isn't working , either.
I have plenty of historical data.
I'm aware of the postscript and that isn't the problem.
OK, I think I know what might be going on. I added logic to not run the indicator if the current bar for the chart pair (by timestamp) is not the same bar as the current bar for the SubSymbol.

Please let me know if this corresponds with what you are seeing.

Thanks.
  • #464
  • Sep 11, 2009 9:08pm Sep 11, 2009 9:08pm
Quoting LucidObscuri
OK, I think I know what might be going on. I added logic to not run the indicator if the current bar for the chart pair (by timestamp) is not the same bar as the current bar for the SubSymbol.

Please let me know if this corresponds with what you are seeing.

Thanks.
That's what it was.
I had a final bar for EUR/USD, that I didn't have for CHF.
I deleted it and it works.
Thanks again.
  • #465
  • Edited 9:53pm Sep 11, 2009 9:21pm | Edited 9:53pm
@billbss, Hi, if I used the indicator as posted here - http://www.forexfactory.com/showpost...2&postcount=70 , how can I add the arrows as shown in the indicators provided here - http://www.forexfactory.com/showpost...&postcount=299

@pippaFett,
http://www.forexfactory.com/showpost...&postcount=316

Is there an option to turn off the "mirror" effect on the secondary pair?


Many thanks!
  • #466
  • Sep 11, 2009 9:45pm Sep 11, 2009 9:45pm
Quoting iamnoel
@billbss, Hi, if I used the indicator as posted here - http://www.forexfactory.com/showpost...2&postcount=70 , how can I add the arrows as shown in the indicators provided here - http://www.forexfactory.com/showpost...&postcount=299

@pippaFett,
Which one should I download?

http://www.forexfactory.com/showpost...&postcount=316
or
http://www.forexfactory.com/showpost...&postcount=299


Many thanks!
You can't add the arrows to the first indicator you listed.

I don't know which of the last two indicators you should download. I haven't used those indicators.
  • #467
  • Edited Sep 12, 2009 9:58am Sep 11, 2009 10:23pm | Edited Sep 12, 2009 9:58am
Quoting LucidObscuri
It does not validate the trade for you. You'll have to wait for the next candle which forms in the correct direction.

I'm only seeing two signals at 12:00 and 13:00 GMT on the 1H chart. The first would have lost and the second would have won (unless you actively managed the trade). You would have gotten signals at 13:00 and 14:00 GMT.

Edit: Sorry, I was looking at the 1H chart. Not the 15M.
but i was talking about the 1h chart

i can see a signal in the 13:00 GMT bar. This arrow was there at the open of the 14:00 bar?

thanks for reply.

EDIT: one more question. If i want to let the EA running many TFs for a given pair, i need to let a chart openened for each time frame or can i let only one chart for the 1min time frame opened?
  • #468
  • Sep 12, 2009 6:20am Sep 12, 2009 6:20am
Sorry if this seems a bit on the dumb side, but if, for example, you are looking at the divergence/difference/correlation between GBPUSD and EURUSD, both are referenced to the USD, so you are essentially looking at the EURO v the GBP.

This is what you get if you look at the EURGBP pair directly. So why bother with the rigmaroll and just trade that pair?
  • #469
  • Sep 12, 2009 7:39am Sep 12, 2009 7:39am
Quoting bigtent
Sorry if this seems a bit on the dumb side, but if, for example, you are looking at the divergence/difference/correlation between GBPUSD and EURUSD, both are referenced to the USD, so you are essentially looking at the EURO v the GBP.

This is what you get if you look at the EURGBP pair directly. So why bother with the rigmaroll and just trade that pair?

1. We aren't looking at the GBPUSD and EURUSD, were looking at the EURUSD and USDCHF.

2. You can't look at a cross pair and see divergence, between its components.
  • #470
  • Sep 12, 2009 12:21pm Sep 12, 2009 12:21pm
Quoting giraia_br
but i was talking about the 1h chart

i can see a signal in the 13:00 GMT bar. This arrow was there at the open of the 14:00 bar?

thanks for reply.

EDIT: one more question. If i want to let the EA running many TFs for a given pair, i need to let a chart openened for each time frame or can i let only one chart for the 1min time frame opened?
The signal will always occur on the close of the candle where you see the arrow.

You'd have to have 1 chart open for the primary pair per timeframe, but I'm not sure if you can just leave one 1M chart open for the SubSymbol. It might work.
  • #471
  • Sep 12, 2009 12:51pm Sep 12, 2009 12:51pm
Quoting LucidObscuri
The signal will always occur on the close of the candle where you see the arrow.

You'd have to have 1 chart open for the primary pair per timeframe, but I'm not sure if you can just leave one 1M chart open for the SubSymbol. It might work.

Sorry, this is wrong. The signal will occur on the close of the bar after the one which has the arrow
  • #472
  • Sep 13, 2009 1:19pm Sep 13, 2009 1:19pm
Quoting billbss
1. We aren't looking at the GBPUSD and EURUSD, were looking at the EURUSD and USDCHF.

2. You can't look at a cross pair and see divergence, between its components.

OK, I'll use those pairs.

EURUSD is the EUR referenced to the USD.

USDCHF is the USD referenced to the CHF. (Which is the inverse of the CHF referenced to the USD).

Since both pairs have a common reference, any divergence that is noticed is the difference between the uncommon parts of the pairs, namely the EUR and CHF.

This is what you see when you look at the EURCHF, is it not?

Basically the three currencies form an interlinked triangle, and a change in any two legs is shown by a corresponding change in the third.

I must be missing something, as I just cannot see the point, as it seems to be adding complexity to the simple.
  • #473
  • Edited 2:46pm Sep 13, 2009 1:50pm | Edited 2:46pm
Quoting bigtent
OK, I'll use those pairs.

EURUSD is the EUR referenced to the USD.

USDCHF is the USD referenced to the CHF. (Which is the inverse of the CHF referenced to the USD).

Since both pairs have a common reference, any divergence that is noticed is the difference between the uncommon parts of the pairs, namely the EUR and CHF.

This is what you see when you look at the EURCHF, is it not?

Basically the three currencies form an interlinked triangle, and a change in any two legs is shown by a corresponding change in the third.

I must be missing something,...


Here is a chart of EURCHF.
There are at least three tradeble divergences between EURUSD and USDCHF,(as described by the system) during this time- maybe more.

Strip the complexity out of it for us.
Use this chart and point out the system trades. Then tell us how you detected them. I would like to know how to do it.
Attached Image (click to enlarge)
Click to Enlarge Name: eu3.gif Size: 40 KB
  • #474
  • Sep 13, 2009 5:55pm Sep 13, 2009 5:55pm
The reason why I wouldn't trade directly EUR/GBP is the low volatility and high spread of that pair compared to EUR/USD and GBP/USD.

Just as an example I have taken Friday's range for those pairs;

EUR/USD: 74 pips with a 2 pip avg. spread.
GBP/USD: 84 pips with a 3 pip avg. spread.
EUR/GBP: 33 pips with a 4 pip avg. spread.

I hope that explains why it's a lot more interesting to trade EUR/USD and GBP/USD.

Quoting bigtent
Sorry if this seems a bit on the dumb side, but if, for example, you are looking at the divergence/difference/correlation between GBPUSD and EURUSD, both are referenced to the USD, so you are essentially looking at the EURO v the GBP.

This is what you get if you look at the EURGBP pair directly. So why bother with the rigmaroll and just trade that pair?
  • #475
  • Sep 13, 2009 7:59pm Sep 13, 2009 7:59pm
Bills, this is a trade for you?
Attached Image (click to enlarge)
Click to Enlarge Name: eu uc.gif Size: 11 KB
  • #476
  • Sep 13, 2009 8:02pm Sep 13, 2009 8:02pm
Quoting giraia_br
Bills, this is a trade for you?
Red line?

No. The second valleys do not happen at the same time.
  • #477
  • Sep 13, 2009 8:04pm Sep 13, 2009 8:04pm
Quoting billbss
Red line?

No. The second valleys do not happen at the same time.
ok. Thanks for the quickly reply


@Lucid

i think it is not necessary to mantain a chart opened for the subsymbol, only swith between time frames is enough to collect data.
  • #478
  • Sep 14, 2009 8:11am Sep 14, 2009 8:11am
Quoting cosgrove
Would you have traded this euro sell? I would have. Trade would still be open with a 62 pip stop.
I probably would have traded it.
It isn't a system trade, though.
The final peaks, on the two pairs do not happen at the same time. They are one bar off.
  • #479
  • Sep 14, 2009 8:19am Sep 14, 2009 8:19am
I deleted my post because I saw this one before hand...

I agree, there are some trades that aren't "A+" -- more thoughts in a sec.
Attached Image (click to enlarge)
Click to Enlarge Name: usdchf_buy_200909111900.gif Size: 21 KB
Hindsight is 20/20
  • #480
  • Sep 14, 2009 8:35am Sep 14, 2009 8:35am
The question I like to ask myself on trades that aren't no-brainers: "is the underlying concept/reason of the trade still evident?"

In the attached chart, I would say yes on both highlighted red areas.

In the first, U/C is exactly flat where E/U is dramatically down; this is still divergence in my book (but what do I know ). Had the slope of the first U/C line even been slightly negative, I would have counted it out.

In the second highlighted area, sure, the swing high of the second E/U peak is technically one bar off, but look at it overall. I don't know any other way to say it, but take the average of both adjacent bars with your eyes, and you can see that it still shows us what the market is thinking: U/C went higher while E/U went lower, ala divergence.

Now whether you put money on trades that alllllllmost fit your system criteria is a different question, which is why this forum exists
Attached Image (click to enlarge)
Click to Enlarge Name: eu_uc_analysis_20090914.gif Size: 22 KB
Hindsight is 20/20
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