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High reliable divergence methodology of trading

  • #121
  • Aug 25, 2010 1:38pm Aug 25, 2010 1:38pm
Quoting Grg
By my part, let me put something useful on the table. When looking for divergences, do not use a bar or candlestick chart. Remember your oscillator is probably based on closes, so it is safer to compare it to an equally based price line chart. Otherwise you risk seeing divergences which are not really given, just because a high/a low that happened to be far from the close.

I agree. Line charts also make the divergences much easier to see.
  • #122
  • Aug 25, 2010 11:14pm Aug 25, 2010 11:14pm
Quoting deltatrade
can macd be used for such divergences? why do you use 3 types of indicators?
Yes, can be. But I am not using it, I don't like the way is drawing the divergences. I use the three oscillators for identifying the majority of the divergences cases.
  • #123
  • Aug 27, 2010 8:40am Aug 27, 2010 8:40am
Quoting billbss
I agree. Line charts also make the divergences much easier to see.
Billbs, but that was my problem with your CCI system and the EU/UC divergence (not saying i am good at any method... i don't have sucess with any system).


if you open the trade without wait the close watching a line (indicator or price) you need to watch every second, and the line is way more volatile and goes to +90 and -90 easily.

so i think you wait the bar close and see where the line settled but in this case the lag is the problem, It is difficult to accept the importance of this signal with such lag.
  • #124
  • Aug 27, 2010 9:23am Aug 27, 2010 9:23am
i mean, if you use the close of a line price, what will you do if the bar is a huge bar? Will you really ignore it min/max information? Because if you start to create rules like "if this is a huge bar" you throw the "edge" of the line price.
  • #125
  • Aug 27, 2010 9:50am Aug 27, 2010 9:50am
thanks for sharing.
  • #126
  • Aug 27, 2010 10:15am Aug 27, 2010 10:15am
Quoting giraia_br
Billbs, but that was my problem with your CCI system and the EU/UC divergence (not saying i am good at any method... i don't have sucess with any system).


if you open the trade without wait the close watching a line (indicator or price) you need to watch every second, and the line is way more volatile and goes to +90 and -90 easily.

so i think you wait the bar close and see where the line settled but in this case the lag is the problem, It is difficult to accept the importance of this signal with such lag.
I don't understand what you're saying.

Using a line graph rather than bars or candlesticks to spot divergence, has nothing to do with waiting for a close.
  • #127
  • Aug 27, 2010 11:54am Aug 27, 2010 11:54am
Quoting billbss
I don't understand what you're saying.

Using a line graph rather than bars or candlesticks to spot divergence, has nothing to do with waiting for a close.
my exprience with it is that when the line close below the last top normally you can see a divergence signal to go short. Then a few bars later price goes up and you can't even see that divergence anymore
  • #128
  • Aug 27, 2010 12:26pm Aug 27, 2010 12:26pm
Quoting giraia_br
my exprience with it is that when the line close below the last top normally you can see a divergence signal to go short. Then a few bars later price goes up and you can't even see that divergence anymore

I still can't figure out what you're talking about.

It doesn't fit anything I have ever seen with a line chart.
  • #129
  • Aug 27, 2010 1:55pm Aug 27, 2010 1:55pm
Quoting billbss
I still can't figure out what you're talking about.

It doesn't fit anything I have ever seen with a line chart.
/

ok. Sorry. Maybe i did not test strategies with line charts enought.

i will test this is specifc method and if i found a example of what i mean i will post here.

thanks for reply.
  • #130
  • Aug 29, 2010 9:48am Aug 29, 2010 9:48am
Quoting giraia_br
i mean, if you use the close of a line price, what will you do if the bar is a huge bar? Will you really ignore it min/max information? Because if you start to create rules like "if this is a huge bar" you throw the "edge" of the line price.

The huge bar doesn't exist for the oscillator (based on closed) nor a short bar does. Only the close does exist to it. The diverging or confirming of the oscillator refers to the close only. Then of course you can do all what you want with the min/max info, you have a mind you want to think about it - that's fine - unless you want to go robotic. If qualitative analysis of the div is part of the way you trade, think and see as much as you can about the price structure and its mirror/oscillator, observe trough different parameters etc. Otherwise, simply wait for the close and care of closes only - that way it's easy to fix a method. Methods with many variables and conditions do exist, but you have to know them like one knows his/her spouse, and still, the risk is that of not stating all, creating short-cuts, making up a bastard system. It's up to you, you care of highs/lows or not. Still, you base your method on that thing that cares not. If there's dissonance, one needs solving it.
  • #131
  • Aug 29, 2010 10:06am Aug 29, 2010 10:06am
Quoting giraia_br
Billbs, but that was my problem with your CCI system and the EU/UC divergence (not saying i am good at any method... i don't have sucess with any system).


if you open the trade without wait the close watching a line (indicator or price) you need to watch every second, and the line is way more volatile and goes to +90 and -90 easily.

so i think you wait the bar close and see where the line settled but in this case the lag is the problem, It is difficult to accept the importance of this signal with such lag.

Not waiting for the end of the period is, in any case, trading a signal on the making; it may appear and disappear different times before the bar is settled. This suggests a higher risk of taking false signals. On the other side, in fast moving markets waiting for the close could be waiting for the enemy so that we politely enter the war-field together. I think it depends a lot on the system, but in general, one has the right to anticipate signals. You better write down the rules on why-when-how or you find yourself doing funny-funny emotional things....
  • #132
  • Aug 29, 2010 10:14am Aug 29, 2010 10:14am
Quoting billbss
I agree. Line charts also make the divergences much easier to see.
i haven't actually ever tested this.

anyone else tried this?
Enter Signature
  • #133
  • Sep 21, 2010 3:56am Sep 21, 2010 3:56am
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  • #134
  • Sep 22, 2010 4:07am Sep 22, 2010 4:07am
A [regular] divergence simply shows loosing steam. It is quite common to have it when the price is meeting with a cluster, or any strong level. A movement loosing steam is just that, as Newton cannot be applied to markets. Anyway, that div is against the trend. Ever tested the method's result in:
- using all div
- using only div with trend?
  • #135
  • Sep 23, 2010 5:59am Sep 23, 2010 5:59am
Quoting Grg
A [regular] divergence simply shows loosing steam. It is quite common to have it when the price is meeting with a cluster, or any strong level. A movement loosing steam is just that, as Newton cannot be applied to markets. Anyway, that div is against the trend. Ever tested the method's result in:
- using all div
- using only div with trend?
I am using only the hidden divergences only wright now, but can be applied to the regular divergences too, but as I said it before, it need 10 times decrease in risk percentage.
  • #136
  • Sep 23, 2010 6:02am Sep 23, 2010 6:02am
Looking for a future entry if confirms the divergence case scenario.

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  • #137
  • Sep 23, 2010 10:24am Sep 23, 2010 10:24am
This is a very interesting trading system concept and I will watch it for sure,diavolul!Imi pare bine ca avem si romani pe-acest forum!
  • #138
  • Sep 24, 2010 12:52am Sep 24, 2010 12:52am
The pair confirms the hidden bullish divergence by crossing the trend line and I have opened a long position which is locked on +1 pip because touched the ZM1. I am watching for TP1 level for partial profit.

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  • #139
  • Sep 24, 2010 3:23am Sep 24, 2010 3:23am
The price rejected strongly and took the stop loss.

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  • #140
  • Oct 5, 2010 8:43am Oct 5, 2010 8:43am
Unconfirmed hidden bearish divergence scenario

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