Hidden Divergence Trades

Yes, and I agree with you Icarus...

I am not saying that divergence can't work for some individuals...those who absorb losers with small losses and hang on to the eventual winners can make just about anything work.

I just think it is misleading to post only winning trades using divergence and, by omission, ignore the losers.


QUOTE]Quote from Icarus5:

Yeah, I personally agree with you HoustonMark, but JP seems to make it work for him ... probably because he doesn't rely on it so much on an intra-day level as he does to get a macro view (daily/weekly) and then hone in on his intra-day trades ... so yeah, you're right again.

Have a great 2008,

I [/QUOTE]
 
Again what makes you think that I don't post losers? I have been posting real-time for quite some time now and you will see both winning and losing trades. Yes, I do consider myself relatively experienced in intraday oscillations, I can see weakness and strength forming with the help of the histogram putting in declining multiple peaks and vice versa. I mostly trade FDAX where I have made myself accept losses of 2-4 points 2-4 consecutive times, even if I don't get a winning trade that day, chances are I will either match that loss tomorrow or cover it with 1 or multi winning trades.

On letting winning trades run. Of course that is the goal with whatever method you use. I am surprised you haven't mentioned here that divergences a lot of the time mark either a bounce or a bounce that leads to a reversal. My win ratio is around 75%, my regular stop is 2-4 points when 1st target is around 10 points and I can hold on to a wining trade at times taking gain on 2nd target into 100+ points. Again, that is the goal with any method you use to use appropriate risk/reward and establish average oscillation parameters following an entry method that can get you over 50% win rate.

I analyse 1-10 minute charts during a trading session and as long as divergence is still present I will try and trade it off every 1 min chart's entry set-up due to fake moves prior to real move taking place. As long as you can establish average range expansion following your entry method you can afford to take multiple shots at it and still come out on top. Have you ever tried shooting a target with an air rifle and missing 2-3 times and would it be realistic to expect your target being reached on 3-5 shot as you get used to it. I am going to crack a joke here so don't start judging based on that alone as I have just type 3 paragraphs, but hey, 3rd time lucky :)
 
I am not here to defend the OP, just my own way of trading, here is a chart, I don't care that it will be viewed in hindsight, it clearly shows that divergence based entries are very achievable, if you apply yourself to it totally.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1727016>
 

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There is that last divergence that was still playing out on previous chart, I scale out, so to me that would have been a winning trade depending on where I set scale out targets, but let's consider it a losing one, we have a very respectable loss vs potential reward. Nothing "fatal", sorry to rub it in with your quote, it just stirred me up a tad :)

All the best to you too!


<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1727026>
 

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There are many different ways to make money in the market and more ways to lose money.

As for Divergence...there are many ways via indicators or price action only (no indicators)...

Dozes of different ways for each.

However, I strongly suspect that those that are profitable...

Their commonalities has nothing to do with their entry signals.

Good trading and Happy New Year 2008

Mark
 
Quote from NihabaAshi:



However, I strongly suspect that those that are profitable...

Their commonalities has nothing to do with their entry signals.
More...

Mark, I am not certain what you are trying to say, please clarify.

This is a Long call I've made in Surfers journal, that was a common triple divergence off TL, when most other longer term charts were bullish ImO. Surfer that thinks nothing of conventional indicators was going to go short at the time.


<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1727036>
 

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Quote from NihabaAshi:

There are many different ways to make money in the market and more ways to lose money.

As for Divergence...there are many ways via indicators or price action only (no indicators)...

Dozes of different ways for each.

However, I strongly suspect that those that are profitable...

Their commonalities has nothing to do with their entry signals.

Good trading and Happy New Year 2008

Mark
More...

Quote from JSSPMK:

Mark, I am not certain what you are trying to say, please clarify.
More...

The issue isn't about a specific method, course or live call.

The issue is that regardless to the method there are profitable traders using it and traders not profitable using it.

That alone puts no value on debating about whether a method works or not as long as there is one trader making money and one trader losing money via that method.

Simply, to many traders at EliteTrader.com spend too much time debating/attacking/arguing or defending a particular entry signal.

Further, if such is occurring with one method and the same is occurring in other methods (one is profitable and one is not profitable)...

Take all the profitable traders using different methods and put them in one room and compare their commonalities to all the not profitable traders in another room...

You'll begin to see there's more to profitable trading (losing trading) besides entry signals.

In the beginning, we are all seduced into thinking its all about the entry signal...

However, as time passes, if we survive and continue being profitable...

Entry signals are just one chapter in a book called Profitable Trading.

Last of all, don't remove yourself from the equation because there's probably a few chapters about yourself as a person in that book called Profitable Trading.

Good Trading and Happy New Year 2008

Mark
 
Here is today's 5 minute ES chart, very obvious divergence on 2-15 min time frames. I didn't trade it, as I wasn't looking at ES at the time, but I would have, most definetly.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1727061>
 

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Quote from NihabaAshi:

The issue isn't about a specific method, course or live call.

The issue is that regardless to the method there are profitable traders using it and traders not profitable using it.

That alone puts no value on debating about whether a method works or not as long as there is one trader making money and one trader losing money via that method.

Simply, to many traders at EliteTrader.com spend too much time debating/attacking/arguing or defending a particular entry signal.

Further, if such is occurring with one method and the same is occurring in other methods (one is profitable and one is not profitable)...

Take all the profitable traders using different methods and put them in one room and compare their commonalities to all the not profitable traders in another room...

You'll begin to see there's more to profitable trading (losing trading) besides entry signals.

In the beginning, we are all seduced into thinking its all about the entry signal...

However, as time passes, if we survive and continue being profitable...

Entry signals are just one chapter in a book called Profitable Trading.

Last of all, don't remove yourself from the equation because there's probably a few chapters about yourself as a person in that book called Profitable Trading.

Good Trading and Happy New Year 2008

Mark
More...

It would be silly of me to dispute the above, bang on the money. A good entry method is 'chapter one', but I hope you would agree that you can't read and understand a book by skipping the very first chapter.
 
Quote from JSSPMK:

I am not here to defend the OP, just my own way of trading, here is a chart, I don't care that it will be viewed in hindsight, it clearly shows that divergence based entries are very achievable, if you apply yourself to it totally.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1727016>
More...
Great post. If you dont mind could you expand on the first two thoughts you have there. (1) analyse range expansion following entry method and (2) compare spread vs range expansion. Also is the histogram stochastics? thx for posting your thoughts and experience with this method. i like it! jim
 
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