Able to Login ok now. Thanks much stratman, Bob
Hej.
I've put together a bit of a post on trix/price divergences and how they may be of use and Stratman has requested I post this here. Hopefully it's helpful 
It's important to first consider what Trix is telling us in general. In my understanding it indicates momentum in price - the rate of price change relative to itself. If price moves very quickly up 20 pips, retraces slightly, then moves up another 20 but at a slower rate, trix will form a lower high. The momentum of the last move up is not as strong as the prior move up in this case. This is regular divergence and a signal that the trend might be at risk of reversing. One way of thinking about this is that the momentum of price is running out - the most recent leg up was not as powerful as the previous one. The trend may be running out of steam.
Another example would be where price is moving up, say 20 pips, down 10 pips at a slow rate, up 20 pips, then down 10 pips at speed. Here trix would make a lower low, but price would be higher. This is termed hidden divergence and is a sign that the trend should continue. The logic here is that although there was a fast move down, there was strong support halting that momentum. A good time to jump into a trend.
In my experience, these signals should only be used in combination with trend-line breaks and a change in the M1 fast trix colour for entry.
My mechanical rules for detecting divergence follow. These are written in order to permit coding of the automatic detection of divergence - which Stratman has kindly agreed to try and include in his dashboard. If anyone has any suggestions or issues with the rules I have laid out, please post them
1. General Rules
- Peaks and troughs in trix are defined as the points at which the colour changes from green to red (peaks), and red to green (troughs)
- The price at the prior peak or trough is not necessarily the candle that lies at the peak or trough. As the candle at this point is not necessarily the highest (at peaks) or the lowest (at troughs), we must allow for +/- 3 candles in either direction.
2. Hidden Divergence
Hidden divergence is defined as trix making a higher high or lower low while price does the opposite.
- When the present trix value breaches a prior peak or trough, a comparison between price at the current level and price at the prior peak or trough must be made.
- We compare the high (at peaks) and the low (at troughs) of this candle to the high/low of the present candle.
- If the trix value is higher, and the present candle low is lower than the prior candle, we have hidden bearish divergence.
- If the trix value is lower, and the present candle high is higher than the prior candle, we have hidden bullish divergence.
3. Regular divergence
Regular divergence is defined as price making a higher high or lower low while trix does the opposite. (I actually find these signals less reliable than hidden divergence)
- If the present price breaches a prior peak candle high or low (as defined previously), the trix values must be compared.
- If the prior price breached is at a peak (i.e. a high) and trix is presently green, and the trix value is lower than the prior trix value, then we have bullish regular div.
- If the prior price breached is at a troug (i.e. a low) and trix is presently red, and the trix value is lower than the prior trix value, then we have bearish regular div.
It's important to first consider what Trix is telling us in general. In my understanding it indicates momentum in price - the rate of price change relative to itself. If price moves very quickly up 20 pips, retraces slightly, then moves up another 20 but at a slower rate, trix will form a lower high. The momentum of the last move up is not as strong as the prior move up in this case. This is regular divergence and a signal that the trend might be at risk of reversing. One way of thinking about this is that the momentum of price is running out - the most recent leg up was not as powerful as the previous one. The trend may be running out of steam.
Another example would be where price is moving up, say 20 pips, down 10 pips at a slow rate, up 20 pips, then down 10 pips at speed. Here trix would make a lower low, but price would be higher. This is termed hidden divergence and is a sign that the trend should continue. The logic here is that although there was a fast move down, there was strong support halting that momentum. A good time to jump into a trend.
In my experience, these signals should only be used in combination with trend-line breaks and a change in the M1 fast trix colour for entry.
My mechanical rules for detecting divergence follow. These are written in order to permit coding of the automatic detection of divergence - which Stratman has kindly agreed to try and include in his dashboard. If anyone has any suggestions or issues with the rules I have laid out, please post them
1. General Rules
- Peaks and troughs in trix are defined as the points at which the colour changes from green to red (peaks), and red to green (troughs)
- The price at the prior peak or trough is not necessarily the candle that lies at the peak or trough. As the candle at this point is not necessarily the highest (at peaks) or the lowest (at troughs), we must allow for +/- 3 candles in either direction.
2. Hidden Divergence
Hidden divergence is defined as trix making a higher high or lower low while price does the opposite.
- When the present trix value breaches a prior peak or trough, a comparison between price at the current level and price at the prior peak or trough must be made.
- We compare the high (at peaks) and the low (at troughs) of this candle to the high/low of the present candle.
- If the trix value is higher, and the present candle low is lower than the prior candle, we have hidden bearish divergence.
- If the trix value is lower, and the present candle high is higher than the prior candle, we have hidden bullish divergence.
3. Regular divergence
Regular divergence is defined as price making a higher high or lower low while trix does the opposite. (I actually find these signals less reliable than hidden divergence)
- If the present price breaches a prior peak candle high or low (as defined previously), the trix values must be compared.
- If the prior price breached is at a peak (i.e. a high) and trix is presently green, and the trix value is lower than the prior trix value, then we have bullish regular div.
- If the prior price breached is at a troug (i.e. a low) and trix is presently red, and the trix value is lower than the prior trix value, then we have bearish regular div.
- #964
- Feb 19, 2010 6:00am Feb 19, 2010 6:00am
- Joined Jan 2010 | Status: Yet to replace my suit in black.... | 3,268 Posts
- #971
- Feb 20, 2010 3:21pm Feb 20, 2010 3:21pm
- | Commercial User | Joined Jul 2009 | 1,436 Posts
which one of you has been promoting the dashboard? 
Found this video on youtube ....
Craig Harris Forex | Natural Flow of the Market | Indicators | PDF | Download
Anyway, thanks ... nice to see that people see the dashboard as a great tool
btw ... anyone else that wants to promote the dash ... feel free.
Found this video on youtube ....
Craig Harris Forex | Natural Flow of the Market | Indicators | PDF | Download
Anyway, thanks ... nice to see that people see the dashboard as a great tool
btw ... anyone else that wants to promote the dash ... feel free.
- #977
- Feb 21, 2010 8:02am Feb 21, 2010 8:02am
- Joined Jan 2010 | Status: Yet to replace my suit in black.... | 3,268 Posts
- #980
- Feb 21, 2010 6:16pm Feb 21, 2010 6:16pm
- | Commercial User | Joined Jul 2009 | 1,436 Posts
I removed the video that this promotion was linked to as I didn't think the content was appropriate.
If you know me well enough, you know that I'm very skeptical of people who seem to have their main source of income derived from selling robots or trading strategies (trading rooms included). Regrettably, I have payed for these services in the past
I wouldn't mind if they ran these services just to recover costs ... after all, they're run by successful traders that make plenty of money from trading? ..... I suspect most are making money from their services rather than from trading
Anyway, did a video explaining that people can learn without those services. Most of the services just recycle trading information that's been around for years ie freely available.
Why pay 1000's for Forex Mentors and Software? Everything ... is ... available for FREE!
If you know me well enough, you know that I'm very skeptical of people who seem to have their main source of income derived from selling robots or trading strategies (trading rooms included). Regrettably, I have payed for these services in the past
I wouldn't mind if they ran these services just to recover costs ... after all, they're run by successful traders that make plenty of money from trading? ..... I suspect most are making money from their services rather than from trading
Anyway, did a video explaining that people can learn without those services. Most of the services just recycle trading information that's been around for years ie freely available.
Why pay 1000's for Forex Mentors and Software? Everything ... is ... available for FREE!
which one of you has been promoting the dashboard?
Found this video on youtube ....
Craig Harris Forex | Natural Flow of the Market | Indicators | PDF | Download
Anyway, thanks ... nice to see that people see the dashboard as a great tool
btw ... anyone else that wants to promote the dash ... feel free.