Hidden Divergence Trades

Quote from JSSPMK:

Not offense taken :)

No, you have to treat 80% as 100% and then apply 75% win rate.

Same goes for 20% of other set-ups, you have to treat 20% as 100%.

Sounds like you have found some sort of Holy Grail my boy, well I haven't, so I had to learn to embrace/accept consecutive losses and learn to trust backtested stats, which would inevitably change through time as you are well aware. And a controlled loss is hardly a bullet to the head LOL.

You made a comment about divergencies mostly working in hindsight, if you can see it after the fact, that means that you can learn to see it in the making and applying risk management and range expansion analyses you can make it work. I didn't say it was an easy ride, a lot of hours went into this.
More...


I totally understand recognizing occurrences in real-time and taking advantage of them.
I'm not a fan of back-testing though but a fan of real-time testing and that is why it has taken me so long to trust how I trade.
No "Holy Grail" here just consistent successes based on consistent price occurrences.

Good luck to you and keep that positive attitude. It is a tool a solid trader needs.
 
I trade ES rth morning session.
On a fast bar chart I wait for a period of hesitation and enter.
If the trade is not filling quickly in my direction, I exit for a tic or two either way and repeat the process again.
Sometimes it takes several entries to connect to the direction and I may be up 2-3 or more net tics before it takes off.
Rarely am I down because fees are cheap and a tic is sacred.
Anyway, that is just the back ground to what I do.

The interesting thing is that when I do connect, quite often there is a divergence showing somewhere. ..ipso facto as it were. ie price leads and divergence follows along.

If you are a divergence devotee, I am sure that you know better than I that the back end of your indicator is driving the divergence,

regards
f9
 
Very true....

If you aren't seeing divergence on one chart, change the compression settings and you can usually find it on a different chart...

Quote from fearless9:

I trade ES rth morning session.
On a fast bar chart I wait for a period of hesitation and enter.
If the trade is not filling quickly in my direction, I exit for a tic or two either way and repeat the process again.
Sometimes it takes several entries to connect to the direction and I may be up 2-3 or more net tics before it takes off.
Rarely am I down because fees are cheap and a tic is sacred.
Anyway, that is just the back ground to what I do.

The interesting thing is that when I do connect, quite often there is a divergence showing somewhere. ..ipso facto as it were. ie price leads and divergence follows along.

If you are a divergence devotee, I am sure that you know better than I that the back end of your indicator is driving the divergence,

regards
f9
More...
 
:D Hi guys. I am newbie in technical analysis and I would like to thank to the initiator of this thread. It is very usefull for me.

Excuse me if the below questions seem silly to experienced traders:

1. Would it be a correct statement that regular divergences occur when a possible trend reversal happens and hidden divergences should be used by a trader as a confirmation of the existing trend? - that is what I observed in my very little trading history (only a few months).

2. I find MACD extreemely usefull at regular divergence spotting. What other indicators would you recommend for regular and hidden divergence. Maybe some volume based ones would be helpfull in confirming / falsificating MACD divergence signals? Some of my divergence trades are not winners (a majority is :p) and I believe a tool for detecting false signals would be needed.

3. Can trading systems with divergence detection be programmed in analytical software and then backtested? Have you tried backtesting? What were the findings of these tests?

Regards
 
....let's say it is a trend day....
toward the end of the day .... down day.... you get a pos div
.... you question... should i go long?.... or will there be another push down ?
....you notice that the div is very large.... suspicious looking it is so large

.... then on the next reaction high after getting the pos div..... you get a lower high on price (the result of the pos div)
..... but your favorite neato indicator makes a significantly HIGHER high.... as compared to its last reaction high
..... that is your signal.... to suspect that there MAY be continuation in the form of at least one more continuation push in the direction of the trend....

....as with any setup... if the setup fails.... then you have an opposite signal....
..... in other words....if you don't get a continuation push.... then things have changed.....

ps... to all the ET monkeys who only come here to show everybody that they know more than the next guy... F you :0)
 
You must log in or register to reply here.
Back
Top