Pair Divergence Method | Page 37 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

What To Pair Divergence With? 14 replies

Divergence and hidden Divergence 122 replies

bo7a method... method for GBP/JPY 205 replies

Divergence method 11 replies

journal for pair divergence method 33 replies

Attachments: Pair Divergence Method
Exit Attachments

Pair Divergence Method

  • #721
  • Edited 8:04pm Oct 27, 2009 3:57pm | Edited 8:04pm
then this EU short on a 1h:

EDIT: in fact this trade was clear on 30 min, not 1h

added another pic.
Attached Images
  • #722
  • Oct 28, 2009 11:13am Oct 28, 2009 11:13am
stopped out on a U/C sell
Attached Image (click to enlarge)
Click to Enlarge Name: usdchf_sell_200910281515.gif Size: 17 KB
Hindsight is 20/20
  • #723
  • Oct 29, 2009 2:07am Oct 29, 2009 2:07am
Hi guys, im a follower of this thread, but I have an observation which is weird... but learning forex we learn to use candlesticks and are steered away from "line" because the candelstick shows more info. I just think that without all the noise on the line chart we can better see where the price is going and can probably create or improve existing strategies,,Am I the only one thinking this??
  • #724
  • Oct 29, 2009 5:33am Oct 29, 2009 5:33am
Quoting Salty
Hi guys, im a follower of this thread, but I have an observation which is weird... but learning forex we learn to use candlesticks and are steered away from "line" because the candelstick shows more info. I just think that without all the noise on the line chart we can better see where the price is going and can probably create or improve existing strategies,,Am I the only one thinking this??
sorry, could not resist.
Attached Image
  • #725
  • Oct 29, 2009 8:48am Oct 29, 2009 8:48am
Quoting Salty
I just think that without all the noise on the line chart we can better see where the price is going and can probably create or improve existing strategies
Are you saying you agree with leaving candlesticks off of the chart, or are you trying to put them back on the chart?

I'm not going to tell you what you can and cannot post in the thread, but I don't believe Bill had discretionary rules based on candlestick patterns in mind when he started this.
Hindsight is 20/20
  • #726
  • Oct 29, 2009 9:15am Oct 29, 2009 9:15am
Quoting cosgrove
Are you saying you agree with leaving candlesticks off of the chart, or are you trying to put them back on the chart?

I'm not going to tell you what you can and cannot post in the thread, but I don't believe Bill had discretionary rules based on candlestick patterns in mind when he started this.
he said "that without all the noise on the line chart we can better see where the price is going and can probably create or improve existing strategies". Then he said if he was the only one wich had this idea.

there is a member at Forexfactory.com that had this idea and opened a thread about it, his nickname is billbs and this is the thread.
  • #727
  • Oct 29, 2009 9:45am Oct 29, 2009 9:45am
Quoting giraia_br
he said "that without all the noise on the line chart we can better see where the price is going and can probably create or improve existing strategies". Then he said if he was the only one wich had this idea.

there is a member at Forexfactory.com that had this idea and opened a thread about it, his nickname is billbs and this is the thread.
I may be wrong, but I think he's saying candles would be better for this than the line charts, I use.
  • #728
  • Edited 9:41am Oct 30, 2009 9:04am | Edited 9:41am
Final trading day in October, let's see what happens!

U/C sell on the 30m. 2xATR = 38 pips

edit: stopped out -- chart updated.
Attached Image (click to enlarge)
Click to Enlarge Name: usdchf_sell_200910301400.gif Size: 17 KB
Hindsight is 20/20
  • #729
  • Oct 30, 2009 9:33am Oct 30, 2009 9:33am
I assume you got stopped out.

On the 15m there was a sell eur/usd, not sure if you noticed that.

Quoting cosgrove
Final trading day in October, let's see what happens!

U/C sell on the 30m. 2xATR = 38 pips
Attached Image (click to enlarge)
Click to Enlarge Name: pairdiv5.png Size: 45 KB
  • #730
  • Oct 30, 2009 9:44am Oct 30, 2009 9:44am
Quoting artov
On the 15m there was a sell eur/usd, not sure if you noticed that.
The U/C overlay didn't make a higher high on my chart, so I didn't count it as a trade.
Attached Image (click to enlarge)
Click to Enlarge Name: eurusd_nosell.gif Size: 17 KB
Hindsight is 20/20
  • #731
  • Oct 30, 2009 12:34pm Oct 30, 2009 12:34pm
Late in the day U/C sell. I'm logging it for tracking purposes, but when I start live, I don't know if I would take such a late trade on Friday just to have to wake up and close it out ~4 hours later.
Attached Image (click to enlarge)
Click to Enlarge Name: usdchf_sell_200910301800.gif Size: 18 KB
Hindsight is 20/20
  • #732
  • Oct 31, 2009 3:46pm Oct 31, 2009 3:46pm
Marking the last trade as a 12 pip loss, as that was the P/L level at the close yesterday.

That brings my October records to 16-11 (59% winners, average win = 1, average loss = 0.922), with three of the losses as partial losses (closed early due to weekend). Expectancy was 0.217 and monthly return when using fixed fractional MM of 3% yielded 17.8%. The equity curve looks like shark teeth.

Again, my back testing/trading style is as follows:

  1. I trade only between the hours of 0600-1800 GMT
  2. I take trades on 15m, 30m, 60m time frames
  3. If I receive an opposite signal for a pair where I have an open trade, I close the current trade but do not enter a new one
  4. I do not hold trades over the weekend
  5. I am allowed to have as many open positions as my risk tolerance and margin requirements allow (I will have to double check this later for that day with like 5 trades to see which were open at the same time -- YMMV)
  6. I round the pipettes to 4 figures after the decimal


Call them filters if you want, but I think they just make sense.

Hindsight is 20/20
  • #733
  • Nov 1, 2009 10:42pm Nov 1, 2009 10:42pm
I just finished my testing for April, and that means I finally have something to compare my back test data to:

Quoting billbss
February
16 W
15 L

March
30 W
26 L

April
16 W
5 L

Total = 82W / 58L
58.6 % W
41.4 % L
Bill's data from that quote was through the 17th. My results for that time period were 14-3. The total of April returned results of 21-8. This corresponds to a win rate of 72.4% and expectancy of 0.448.
Hindsight is 20/20
  • #734
  • Nov 3, 2009 2:28pm Nov 3, 2009 2:28pm
First trade of November is a winner.
Attached Image (click to enlarge)
Click to Enlarge Name: usdchf_sell_200911031745.gif Size: 17 KB
Hindsight is 20/20
  • #735
  • Nov 3, 2009 5:23pm Nov 3, 2009 5:23pm
Quoting cosgrove
First trade of November is a winner.
i am extremally pissed off because i was watching this trade live and did not take this.

did you take this trade at the small bar with yellow arrow or 2 bars before?

thanks for sharing your charts and tests.
  • #736
  • Nov 3, 2009 5:42pm Nov 3, 2009 5:42pm
I've noticed for a few trades that Cos you often took these very "fast" set-up.

"fast" means that the setup from beginning to end is very short, say only 1 or 2 hours, that makes the setup less significant. Considering the setup is formed near the end of day(i see it is close the vertical dash line?), it is even less significant.

On the other hand, to me, the white line and circles demonstrate a far more significant set up with larger price movement. and two possible entry levels indicated by blue lines.

my 1 cent tho.

Quoting cosgrove
Final trading day in October, let's see what happens!

U/C sell on the 30m. 2xATR = 38 pips

edit: stopped out -- chart updated.
Attached Image (click to enlarge)
Click to Enlarge Name: usdchf_sell_200910301400.gif Size: 17 KB
  • #737
  • Edited 8:47am Nov 4, 2009 8:29am | Edited 8:47am
Quoting charvo
I've noticed for a few trades that Cos you often took these very "fast" set-up.

"fast" means that the setup from beginning to end is very short, say only 1 or 2 hours, that makes the setup less significant. Considering the setup is formed near the end of day(i see it is close the vertical dash line?), it is even less significant.

On the other hand, to me, the white line and circles demonstrate a far more significant set up with larger price movement. and two possible entry levels indicated by blue lines.

my 1 cent tho.
Hi Charvo,

Thank you for your suggestions. I guess I haven't said it before, but I am testing this system as mechanically as possible, with my steadfast rules already being posted. This means I'm trading every divergence that falls into those rules, no matter the amount of time it took the setup to form, or whether or not it's at the beginning or end of the time limit/on a Friday (just so long as it is within the limits!), etc.

I'm not trading live yet, so a careful analysis of these trades and those rules will follow my data gathering, and I can guarantee you that my rules will change before I stick my neck out there. If my analysis concludes that "fast" trades are significantly less profitable than "slow" trades, then I will either approach them with a smaller position size, or I will not trade them at all. (Here's an idea: what if you had a position size algorithm that was not only based on your SL, but also the size of the pattern?) I will only do this after hard statistical evidence shows the way.

As for your suggested trade, the valleys on the left side do not line up, so I did not count it as a trade (I'm pretty sure this is an original stipulation of Bill's from day 1). Yes, it is divergence, and yes, if you traded it you most likely would have made money; however, if I count it in my trade statistics, then I must also look back over all of the other divergences that weren't quite lined up and see how they turned out. I'm trying to keep it as simple as possible right now.

To be clear, the trade was at GMT 13:00, with my own "end of day" being GMT 18:00. The white vertical dash lines are simply markers to the entry bar of the trade. I'm sorry that they are in the same style as the period dividers in MT4, but I have those turned off
Hindsight is 20/20
  • #738
  • Nov 4, 2009 8:44am Nov 4, 2009 8:44am
The "wiggles" on this one are pretty correlated, so I wouldn't feel bad taking it as a trade; however, an eventual thorough review of all trades will be the deciding factor.
Attached Image (click to enlarge)
Click to Enlarge Name: usdchf_buy_200911041315.gif Size: 17 KB
Hindsight is 20/20
  • #739
  • Nov 4, 2009 9:10am Nov 4, 2009 9:10am
Quoting cosgrove
That brings my October records to 16-11 (59% winners, average win = 1, average loss = 0.922), with three of the losses as partial losses (closed early due to weekend). Expectancy was 0.217 and monthly return when using fixed fractional MM of 3% yielded 17.8%. The equity curve looks like shark teeth.
Artov caught a trade that I missed, so here are the updated October statistics:

16-12 (57% winners, average win = 1, average loss = 0.93)
Expectancy of 0.167
FF MM of 3% got you 14.3% yield on the month
Hindsight is 20/20
  • #740
  • Nov 4, 2009 11:04am Nov 4, 2009 11:04am
Hi, Cos, thanks for your inputs.

I'm not native speaker, so not quite sure about "line up", what's that?

I thought that only watching for higher high and lower low......

Quoting cosgrove
As for your suggested trade, the valleys on the left side do not line up, so I did not count it as a trade (I'm pretty sure this is an original stipulation of Bill's from day 1).
1 trader viewing now