Hidden Divergence Trades

Quote from JSSPMK:

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.
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It's not recommended to skip any chapters even though I disagree (not arguing) that entry signals are chapter one due to my own personal experiences.

Simply, not all profitable traders started with entry signals.

Therefore, your experience has Entry Signals as Chapter One.

My experience has other things as the early chapters prior to reaching a chapter called Entry Signals.

Good Trading and Happy New Year 2008

Mark
 
Quote from jim c:

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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TY!

1) Once you have found an entry method you have to establish what is an expected average expansion range, that means once you are in a position how far on average would price run from your entry point. If that average is around 10 points, then your stop has to be around 3 times less that range ie 3 points or so, that way you warrant that losses will be offset by your winning trades, etc.

2) Spread vs Range expansion, well obviously if you have found an entry method with an average range expansion of 10 points and the spread for that future is .50, then it would be different than a spread of 3 points, average range expansion has to be quite a bit x more than total spread;

3) I use MACD's histogram with standard settings, ImO easiest way to see when bulls might be shaken out and bears squeezed as intraday price action is a lot more emotion based, I think so anyway.
 
Quote from NihabaAshi:

It's not recommended to skip any chapters even though I disagree (not arguing) that entry signals are chapter one due to my own personal experiences.

Simply, not all profitable traders started with entry signals.

Therefore, your experience has Entry Signals as Chapter One.

My experience has other things as the early chapters prior to reaching a chapter called Entry Signals.

Good Trading and Happy New Year 2008

Mark
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Mark, you are deviating from what I was replying to and that was basically divergencies do not work type of an opinion from another member/s, obviously an entry method is just part of a profitable system, I can't dispute that. What would you do if I was to tell you that hammer based entries are pants.

All the best to you in 2008 also!
 
Quote from JSSPMK:

... as intraday price action is a lot more emotion based, I think so anyway.
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Interesting thought JSSPMK.

I would have thought that given the amount of intraday machine trading, that emotion based entries and exits would play a minor role.

regards
f9
 
Quote from fearless9:

Interesting thought JSSPMK.

I would have thought that given the amount of intraday machine trading, that emotion based entries and exits would play a minor role.

regards
f9
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Well, thank God that machines have not totally taken over yet, humans still drive the markets.
 
Quote from JSSPMK:

Well, thank God that machines have not totally taken over yet, humans still drive the markets.
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What % of say the ES do you think is machine traded each day.

regards
f9
 
Quote from fearless9:

What % of say the ES do you think is machine traded each day.

regards
f9
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I mostly trade FDAX, sometimes ES. Method that I use performs better in fDAX. I can't answer your question, what I don't know I can't have an opinion on, but I do have an opinion based on price action in relation to histogram, so my conclusion is more to do with observation rather than hard statistical factual info. I consider myself very fluent in histogram 'interpretation'.
 
Quote from JSSPMK:

...What would you do if I was to tell you that hammer based entries are pants.

All the best to you in 2008 also!
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I would to the same as I've always been known to do at ET...

I ask you to show me Hammer patterns that failed and I'll help you to better understand why they failed and try to find out what other things had impact on their trade decision concerning that failed trade especially if its a trade you would not have taken yourself.

Some took me up on the offer in the Trading Hammer's Revisited thread while others quietly went away.

Simply, ask them to show you that Hidden Divergence don't work...

You can then educate them about why it failed and/or about anything they did wrong.

Mark
 
I am not here to advocate hidden divergences, I just responded to a very general post from another ET member, I know you pay it forward quite a bit on ET, I respect your efforts. Personally I would help if somebody asked my opinion, no point helping a person that says it doesn't work in real trading scenarios, only in hindsight.
 
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