Emini daytrading system

[Walther]

Hello,
I would like to know if someone can backtest this following system,
Find high(low) point on 5 min chart.
10 point from high(low) is a setup.
Trigger is to buy(sell) at pullback when stoch is over 80( below 20) and forming divergence.
Stop is initial high(low) starting spot or trailing stop equal to distance from initial starting point and entry.
I do not think that anyone can program divergence but iI would like to be wrong.
Walter

 

[mdmbud]

If you want the data, I can send it to you so you can test it in excel..... Let me know.

 

[dottom]

Originally posted by Walther
I do not think that anyone can program divergence but iI would like to be wrong.

Divergence is easy to determine 100% mechanically as long as you can describe it objectively. For example:

- Take the peak (highest high) of past 5 bars and compare to peak of 20 bars.
- These two peaks must be least X bars apart
- The lowest low between peaks must have fallen to at least Y value.

The "lazy man's" way to do a divergence check is to do a simple slope. e.g. if highest high of past X days is < highest high of past Y days. Same rules apply for filters to add, depending on your ability to add customized rules.

 

[JWS11]

There are several TS modules on the market that signal when there's a divergence, and even double divergence (two oscillators showing simultaneous divergences,) e.g., at www.janarps.com, www.tradingalchemy.com, etc.

 

[mike_dell]

If you do get the results, let me know them please. thanks!

 

[dozu888]

I tested some divergence with MACD, Stoch and such, they are useless.

Please thank me for saving you some time

 

[traderkay]

one does not need to buy a 'plug-in' from jan arps or any other 'guru' to code divergences. just read the description of coding given above, and it's easy.

 

[Walther]

Thanks all,
My problem is tha I have no TS nor enough of computer prowess to test this system. I hope that somebody will give it a shot.
Walter

 

[Walther]

Somebody will test that system, or at least express opinion?
Walter

 

[TriPack]

Originally posted by dozu888
I tested some divergence with MACD, Stoch and such, they are useless.

Please thank me for saving you some time

I know you don't want a lecture, but let's not forget that just because you haven't been able to create and backtest a profitable strategy from divergence, doesn't mean divergence is "useless". In fact I know a guy who has been quite successful using divergence as a primary tool and trading it semi-mechanically. The key to divergence, and any other counter trend trading method is to limit it to only trading while the market isn't strongly trending.