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swansjr

Any Delta Divergence Ideas?

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The indicator appears to hold potential as a possible entry signal. However, since it requires live data I'm having a heck of a time testing it. Currently I have a very basic system in order for me to get the feel of how the indicator works with live data.

 

My setup is this:

5-minute chart of YM

When Delta Divergence fires go Long/Short on next bar at market

Set Target of 25 points

Set Stop of 30.

Only trade during 8:30 - 14:30 (central)

 

I started testing this about a week ago and looks like it has potential. Obviously there will need to be changes and a lot more testing. Thus to help speed this up I was wondering if anyone else had some ideas on using Delta Divergence as part of a trading system? Or maybe you just have an idea such as a filter to exclude signals. Anyway, would love to hear some thoughts on using Delta Divergence.

 

Thanks all.

Jeff

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Jeff

 

Since the Delta Divergence requires live data, therefore with it being difficult to backtest, have you tried the volume divergence indicator I coded up? Just a thought as it may help you with testing out your system.

 

Cheers

 

Blu-Ray

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Blu-Ray,

 

I've not tried that. It's an interesting idea. Are you saying the volume divergence is similar enough that developing my system under this would be worth a shot? If so, that's a great idea.

 

Thanks for the idea. I'm going to look into that.

 

 

Jeff

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Jeff

 

I think it's definately worth looking at, if this is the route you're going down, as it is the actual volume that has traded. It will also let you know if it's got potential or not, as you can go back months/years rather than just whats on the screen at the time with the delta divergence.

 

Cheers

 

Blu-Ray

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Try searching ET for posts by 5pillars lots of info and charts on how he does it. This cropped up here a while ago and I had a couple of other suggestions which escape me now.

 

If you are going the system route you might want to consider Neoticker. Its Tick Precise and/or Tick replay features will let you test on bid ask and last data streams.

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Try searching ET for posts by 5pillars lots of info and charts on how he does it. This cropped up here a while ago and I had a couple of other suggestions which escape me now.

 

If you are going the system route you might want to consider Neoticker. Its Tick Precise and/or Tick replay features will let you test on bid ask and last data streams.

 

Thanks for the help. Looks like there is lots of videos on marketdelta.com and a long post or two at elitetrader. I'll try to get to them this weekend.

 

Here are some of the links for others who might be interested.

 

http://www.elitetrader.com/vb/showthread.php?threadid=78053&perpage=6&pagenumber=1

 

http://www.marketdelta.com/recordings.aspx

 

Jeff

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One thing to note with market deltas video on delta divergence is they are plotting "delta bars" and not plotting over time. Basically, you can set the plots so that a bar is only plotted at X number of contracts on one side of the bid/offer.

Basically like constant volume bars with only one side of volume. Its quite interesting from messing around with it but I believe its a bit different than what 5pillars was doing in the ET thread, I still didn't quite understand how he was trading that stuff. With the delta bars you clearly see areas of congestion vs activity as bars are simply not plotted and just get longer as the market consolidates.

If anyone would want to figure out how to overide Ninja's plots to make delta bars, I would certainly be into helping out on that project. I think Ninja will ultimately crush neoticker in the next few years. Neoticker is amazing but it feels like your running a program written for windows 98.

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