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The biggest lie about divergence in trading

  • #81
  • May 20, 2016 1:36am May 20, 2016 1:36am
Anyway seahorse is awesome.
  • #82
  • May 20, 2016 1:58am May 20, 2016 1:58am
Quoting wolf300
{quote} Hey cat and all warriors on the battlefield of egomania and "I am right, you`re not" divergence works and where and when not. Easy, isn`t it ....
Funny isn't it how some people react in this way just because you post analysis, opinions and charts, and then having issued their rebukes, they go and do exactly the same thing themselves. No pleasing some people I guess.
  • #83
  • May 20, 2016 1:59am May 20, 2016 1:59am
Quoting COGSx86
Divergence comes down to how the position is managed. If the position is managed to moving in a certain direction, and then moves in that direction according to the plan(the plan you should have before making any trade) divergence is working. If price moves against the plan, you close the position. You arent wrong, your right, you understood the market wasnt ready for the reversal. Thats a very solid decision to close the order before it moves against you. This is why trading is 80% mental. You might only be right 20-30% of the time and you...
Why can't this be made into an automated process that should involve a few hundred lines of code ?

That'll buffer you from the mental/psychological exposure and renders it irrelevant, wouldn't it ? Instead of continued exposure to this psychological tormenting radiation.
  • #84
  • May 20, 2016 2:05am May 20, 2016 2:05am
Quoting hanover
Divergence is caused by deceleration in price. Oscillators measure rates of change (remember differential calculus at high school?): when price decelerates the rate falls, and hence the oscillator prints a lower value, while price moves higher less quickly. If this deceleration results in a reversal, then the divergence can be traded profitably. If it turns out to be a mere lull in the move, then when the move resumes your divergence trade heads under water. Price must decelerate before reversing, but deceleration doesn't guarantee a reversal. In...
Hanover talks right. But divergence is not only about indicators its about the flow. If the wall of limit orders is strong and/or momentum of market orders is weak we can see how the price decelerate and start to move in another direction. In another way, if the wall of limit orders is weak and/or momentum of market orders is strong the price can rebound from the level. We couldn't to see how strong the wall but we can meagure momentum of market orders as Hanover talks. It means that you have probability of loose because some moments you don't understand.
Anyway everybody can research divergence in internet because people already write a lot about that.
  • #85
  • May 20, 2016 2:14am May 20, 2016 2:14am
Quoting roughtrader
I seriously would not be surprised if you would get the same result. if you traded your strategy without divergence.
Correct. It's just a heads up.
  • #86
  • May 20, 2016 2:18am May 20, 2016 2:18am
Quoting roughtrader
The biggest lie in trading is, "Divergence gives the best signals" we have all read it in countless of books about trading. I have made several EAs trading both classical and hidden divergence, the results have been very poor, none of them gives a good signal. opinions? maybe it worked 30 years ago when some authors wrote those books? but I really doubt that, did anyone here have a good result with divergence? would be interested to hear your thoughts about it.
But the biggest truth is that you haven't understood divergence at all!
The fact that you have been writing EA's to trade divergence says it all. Looks like the info you have on divergence is the ones floating around on FF and Babypips. Sadly that's a big misconception. I won't go into much details as it took me years to figure out the true meaning of divergence and how to trade it.

But, if you are so convinced that divergence is a big lie based on a specified set of rules resulting in consistent losing.... More power to you!
  • #87
  • May 20, 2016 2:24am May 20, 2016 2:24am
Quoting cat
{quote} Funny isn't it how some people react in this way just because you post analysis, opinions and charts, and then having issued their rebukes, they go and do exactly the same thing themselves. No pleasing some people I guess.
Ah, come on Cat,
you disappoint me now, I thought you would understand what I am saying.
Were able to read between the lines.
My point was that every time someone starts a new thread with ideas, charts and in your case intelligent teaching
and beeing nice to share good stuff, trolls like seahorse come and try to ruin everything. Just tried to point in the "be objective" direction.
English is not my language, but it is not that I spoke in chinese, did I. Damned.
  • #88
  • May 20, 2016 2:44am May 20, 2016 2:44am
Quoting wolf300
{quote} Ah, come on Cat, you disappoint me now, I thought you would understand what I am saying. Were able to read between the lines. My point was that every time someone starts a new thread with ideas, charts and in your case intelligent teaching and beeing nice to share good stuff, trolls like seahorse come and try to ruin everything. Just tried to point in the "be objective" direction. English is not my language, but it is not that I spoke in chinese, did I. Damned.
"Hey Cat and all warriors on the Battlefield of egomania..."

I don't think I need to do too much reading between the lines here as that is how it is written and that is how it reads, but never mind, no offence here I can assure you and I do appreciate that English is not your first language and that you use of words did not convey the meaning you intended. Everybody is entitled to their own opinion here on ff, and of course we will always disagree with each other, although exceptions have to be made for useless trolls like seahorse who invade threads with the sole purpose of rubbing people up the wrong way and posting utterly useless, inane comments which have no benefit to mankind whatsoever.

Moving on.....
  • #89
  • May 20, 2016 3:12am May 20, 2016 3:12am
Maybe he meant "hey all"
  • #90
  • Edited 4:01am May 20, 2016 3:41am | Edited 4:01am
one should not ignore Fundamental Factors that would never follow the technical vibs just like Daily High Impact News
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If you have to make a mistake, make sure it is a new one
  • #91
  • May 20, 2016 5:49am May 20, 2016 5:49am
Quoting seahorse
{quote} I see you are in the business at least since Oct 2010, about 6 years. You already should know what moves the price. But I will give you an "eye-opening" moment and for your friend Copernicus also. And dont need to thank me So if divergences dont move the price = BS I wish you all the luck $$ PS: And I don't believe that you have fantastic results with divergences
Please tell me sir, what indicator can move the price...?

With your logic: all indicator = BS
  • #92
  • May 20, 2016 5:50am May 20, 2016 5:50am
Quoting Calculus
{quote} Class comment. Most market participants are pussies, most won't admit it. If most market participants don't get particular good results that's just one of the reasons. So we have to do the hard thing, that's what separates the real performers from the wannabees. That's why trading is hard because almost every day we have to do the hard thing. Ever worked in insurance/law/construction/almost any other job? Did you have to do the hard thing almost every day or just once in a while preferring to take the easy route? That's fine in most of those...
Fabulous post Calculus. Doing the hard thing every time you want to make money has few parallels in the business world, at least not where you get punished so ruthlessly and immediately every time you make the wrong call. This is what prevents most of us from trading freely, which is the way you have to trade if you're going to make money.

I remember reading somewhere that if you knew that this was going to be the last week of your life, you'd have the best week's trading you've ever had, presuming of course, you did actually have an edge in the first place.
  • #93
  • May 20, 2016 6:10am May 20, 2016 6:10am
In my opinion both camps are right: divergence works and it doesn't. On its own, it definitely doesn't, for price can be diverged for quite some time. It doesn't mean there will be a reversal - in a strong move, the smallest of pullbacks is enough to re-adjust the indicator.

This is how I use divergence. I ascertain the current direction using the weekly and daily charts. Note that it is direction and not trend. Trend is far too subjective and meaningless to me. I use S/R, fibs, sometimes candle patterns, then if it all fits and there is a nice divergence, then all the better. I then trade off H4 and H1 charts. Easy and simple.
  • #94
  • May 20, 2016 6:33am May 20, 2016 6:33am
Quoting jen101
In my opinion both camps are right: divergence works and it doesn't. On its own, it definitely doesn't, for price can be diverged for quite some time. It doesn't mean there will be a reversal - in a strong move, the smallest of pullbacks is enough to re-adjust the indicator. This is how I use divergence. I ascertain the current direction using the weekly and daily charts. Note that it is direction and not trend. Trend is far too subjective and meaningless to me. I use S/R, fibs, sometimes candle patterns, then if it all fits and there is a nice...
This is what I mean.
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  • #95
  • May 20, 2016 6:56am May 20, 2016 6:56am
Excellent thread and bit ambiguous. Like all ambiguous provoke interest. For me, a divergence good as a confirmation.
I used to use standard stochastic (5, 3, 3). But some fundamentals have played against me. Now I'm guided by a set of several tools including the divergence, but always with the trend and don't make big bets on.
  • #96
  • May 20, 2016 9:29am May 20, 2016 9:29am
Ill tell you guys a secret Ive learned from trading forex for 11 years that keeps me winning. its HIDDEN DIVERGENCE!! I'd say its an 80-90% win ratio... happy trading gentlemen..
  • #97
  • May 20, 2016 10:32am May 20, 2016 10:32am
Quoting skyway
{quote} Why can't this be made into an automated process that should involve a few hundred lines of code ? That'll buffer you from the mental/psychological exposure and renders it irrelevant, wouldn't it ? Instead of continued exposure to this psychological tormenting radiation.

TO be honest the complexity of an algorithm that takes into account the follow would require some serious math skills:

Supply Demand Zones
Trends
MTF
Wave count
Volume accumulation/ rate of change
Chart Patterns
News Events
Large un-impacting candle moves (Large unexplained candles)
Fibonacci projections

The list goes on hahaha, its almost like you need your masters or phd with C+ coding.
Learn, a forex trader must, unlearn and relearn he will.
  • #98
  • May 20, 2016 8:13pm May 20, 2016 8:13pm
Quoting FXEZ
{quote} That's a really interesting post, roughtrader. I generally share that sentiment and see that this is a dividing line between those who practice heuristic analysis and those how practice scientific analysis.
Thanks FXEZ, Thanks for sharing your thoughts and calculation, very interesting.
Bulls are stupid Animals!especially when Im short!
  • #99
  • May 20, 2016 8:42pm May 20, 2016 8:42pm
Quoting jw1981
{quote} But the biggest truth is that you haven't understood divergence at all! The fact that you have been writing EA's to trade divergence says it all. Looks like the info you have on divergence is the ones floating around on FF and Babypips. Sadly that's a big misconception. I won't go into much details as it took me years to figure out the true meaning of divergence and how to trade it. But, if you are so convinced that divergence is a big lie based on a specified set of rules resulting in consistent losing.... More power to you!
Thanks for you comment, I don't mean to hurt any ones ego or methods, this is just an open discussion about divergence,
I am not convinced in anything and always open for suggestions, and I am fully capable to admit I'm wrong if you can show me evidence,
I can only speak based from my own results and experience testing divergence,
but since you understand divergence so good, then I would be happy if you could enlighten me.
Bulls are stupid Animals!especially when Im short!
  • #100
  • May 20, 2016 11:50pm May 20, 2016 11:50pm
You are good in provoking people (in a good way) hoping for some worthy sources that have been successfully provoked to post their gems hahaha... it's ok, just Keep it up!

Quoting COGSx86
{quote} TO be honest the complexity of an algorithm that takes into account the follow would require some serious math skills: Supply Demand Zones Trends MTF Wave count Volume accumulation/ rate of change Chart Patterns News Events Large un-impacting candle moves (Large unexplained candles) Fibonacci projections The list goes on hahaha, its almost like you need your masters or phd with C+ coding.
If you love calculus then everything should be easier from ever since!
If you have to make a mistake, make sure it is a new one
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