Divergence Trading Strategy- Advanced

[Freddy Z 10]

typical desperate scammer... OT on other's thread, then plaster it with his own promotional material... he thinks he can do it because he is a paid sponsor. I think not. He is a sponsor in his own dedicated forum. It gives him no right to hijack other people's thread with his commercials. This just shows his untasteful unscrupulous character.

 

Hello to everyone. This is my first post on this forum. I know of about three or four forums overall, but I hardly ever look at any of them (including this one) because of all the dumb conversations. This thread here is a very good example. This person Do or Die feels disrespected because this other person Urma disagrees with his method of divergence analysis, so he goes on to attack him for his opinion. He accuses him falsely, for example saying that he claims to manage other peoples money, but when the defendant corrects him by saying that he only stated that he manages other traders, the attacker doesn't even stop to apologize because he's still in a rage for feeling disrespected about his divergence technique. And on top of this, other people are jumping in to attack this Urma person aswell, simply because of his opinion. IS THIS STUPID OR WHAT?!

 

Now, I don't know who this Urma person is or what he's selling, and it really doesn't matter. There are honest and dishonest business people in every aspect of this world. If you have proof that this person is one of the dishonest people, then state and show your proof with facts. Otherwise, don't judge and don't attack out of suspecion or prejudice. Also, when you falsely accuse some one of something and you're proven wrong, then have the decency to at least apologize before you quickly change the conversation (and hoping no one noticed your foul up).

 

Again, I'm not taking sides here. But I'm NOT blind either. It's very obvious when some one is out of line. And I can honesltly tell all of you guys here that are attacking this Urma person, that you're ALL out of line.

[UrmaBlume 10]

Hello to everyone. This is my first post on this forum. I know of about three or four forums overall, but I hardly ever look at any of them (including this one) because of all the dumb conversations. This thread here is a very good example. This person Do or Die feels disrespected because this other person Urma disagrees with his method of divergence analysis, so he goes on to attack him for his opinion. He accuses him falsely, for example saying that he claims to manage other peoples money, but when the defendant corrects him by saying that he only stated that he manages other traders, the attacker doesn't even stop to apologize because he's still in a rage for feeling disrespected about his divergence technique. And on top of this, other people are jumping in to attack this Urma person aswell, simply because of his opinion. IS THIS STUPID OR WHAT?!

 

Now, I don't know who this Urma person is or what he's selling, and it really doesn't matter. There are honest and dishonest business people in every aspect of this world. If you have proof that this person is one of the dishonest people, then state and show your proof with facts. Otherwise, don't judge and don't attack out of suspecion or prejudice. Also, when you falsely accuse some one of something and you're proven wrong, then have the decency to at least apologize before you quickly change the conversation (and hoping no one noticed your foul up).

 

Again, I'm not taking sides here. But I'm NOT blind either. It's very obvious when some one is out of line. And I can honesltly tell all of you guys here that are attacking this Urma person, that you're ALL out of line.

 

Freddy,

 

Wow, logic, perception and understanding of the facts, the topic and the issues at hand.

 

Plain simple truth is a plus in any discourse - welcome to Trader's Lab.

 

Thanks for the note and the PM with your phone number. If it is convenient with you, I will call you a couple of hours after the open Monday and try and answer your questions. I welcome all honest queries and look forward to speaking with you.

 

cheers

 

Pat

Edited December 12, 2011 by UrmaBlume

[UrmaBlume 10]

Dear Mr. Vendor, kindly read the first post (and this time properly), this is where the discussion supposedly started before you brought your mysterious indicators.

 

Mysterious? Maybe to you. The algorithms behind Cumuliative Market Delta and moving windows of order flow have been out there for some time.

 

Of course if the total depth of your research has left you with the idea that price/price divergence trading is a "...Trading Strategy - Advanced" then maybe you missed them. Such readily available formulae are only mysterious to "shallow drillers."

 

UrmaBlume

[Do Or Die 10]

Mysterious? Maybe to you. The algorithms behind Cumuliative Market Delta and moving windows of order flow have been out there for some time.

 

Of course if the total depth of your research has left you with the idea that price/price divergence trading is a "...Trading Strategy - Advanced" then maybe you missed them. Such readily available formulae are only mysterious to "shallow drillers."

 

UrmaBlume

 

I will answer in appropriate thread http://www.traderslaboratory.com/forums/technical-analysis/5288-trade-flow-harmonic-trade-6.html#post133630

 

Requesting all to post material relevant to the threads only

[onesmith 10]

Price based indicators compare price to price_trend, (not price to price). I'm not aware of anything offering a more optimal divergence signal than divergence from trend.

[UrmaBlume 10]

Price based indicators compare price to price_trend, (not price to price). I'm not aware of anything offering a more optimal divergence signal than divergence from trend.

 

Under the topic, "The Physics of Price," consider that price is an object propelled by a force. With that as a given then a more optimal divergence would be a divergence between the path of the object and the magnitude of the force.

 

What you are talking about is a difference between the object and its path with no consideration of motivation.

 

UrmaBlume

[onesmith 10]

It is better for me to withdraw at this point, after you've posted a reasonable refutation, that is quite eloquent btw, but does not disuade me from my own truth. Wiithdrawl is better for me, than pursuing where this would go from here.

[UrmaBlume 10]

It is better for me to withdraw at this point, after you've posted a reasonable refutation, that is quite eloquent btw, but does not disuade me from my own truth. Wiithdrawl is better for me, than pursuing where this would go from here.

 

Thanks for the kind words.

 

Certainly you are correct in saying that price, raw price, is different from the treand of raw price but still the trend is calculated from raw price while the calculation of the motivator of price does not include price in any form as part of its inputs. Thus a difference between an object and a force instead of a difference between an object and one of its derivatives.

 

cheers

 

pat

[onesmith 10]

Just so we're clear on this last point, I understand your logic. It's good but it's wrong. I could refute it but I choose not to.

[Do Or Die 10]

Calls on hourly time frame:

 

(none yet)

[Do Or Die 10]

Update:

 

Exit VRSN at today's average price (33.60)

Tight profit stop for CMS(20.70), EOG(102.20) and NSC(73.40)

Hold comfortably DGX, AET, ETN, NSC, EOG; stop is recent pivot high on daily.

 

All calls in profit, except VRSN. So update dedicated to the technology that predicts peak/bottom with 100% accuracy.

 

Continued from the starting posts...

 

dgx, aet, cms, etn, nsc, slb, fdx, are in favor.

 

eog and etn somewhat dangerous.

 

No long signals, yet. All trades on daily charts only, because they can be conveniently posted in non-market hours. If feasible, I will try to post maybe few on intraday time frame such as 2-minute.

 

PS: Do not post in this thread the following, you are always free to start your own thread:

1. Charts with mysterious black-box indicators

2. Claims about profitability of a method without log of live trades

3. Please read the starting post, inclusive of these sentences:

"BTW, the 'advanced' word in title is more of a cliche"...

"I will be calling some signals live in this thread, so it will also serve the purpose of a journal..."

...I use the most recent pivot high, bar high or support as stop loss.

 

Shorts triggered in VRSN, DGX, AET, CMS, EOG, ETN, NSC, SLB, FDX.

Edited December 12, 2011 by Do Or Die

[zdo 20]

Do or die,

 

+1 for diverging instead of confirmed divergence – regardless of between what measures the diverge is occurring. In all my years, I've heard very little comment (or posts) re the concept of diverging. I admire your perspectives...

 

Rationally, fully formed divergences look safer. In real life, they aren’t.

In the limited market conditions where I utilize diverg., the tested odds of payoff are better for my diverging setups than they are for fully formed divergences – even if I’m using a very short right strength on the pivots. So now in all mkt conditions where diverg is utilized, I go ahead and start building the position using diverging instead of divergence … tactical fitness…

btw, using diverging as we speak real time, just starting to cover some of the EUR shorts I put on last week (fwiw, it will probably be 24+ hours before the positions are fully unwound though...)

 

Do you use classical pivots for all but the current swing or does your method for measuring diverging not use pivots at all? Thanks.

Edited December 13, 2011 by zdo

[Do Or Die 10]

 

Great to see a fellow divergence trader. In every book and on internet I see the people going by the conventional way to confirm consecutive pivots, but by the time it is confirmed the risk/reward is already screwed.

 

"Do you use classical pivots for all but the current swing or does your method for measuring diverging not use pivots at all?"

 

See the attached example, I use the classic pivot in prices which may or may not correspond to the pivot in oscillator (the blue spike in lower pane indicates divergence). The typical entry is when market cuts the high of previous bar.

[UrmaBlume 10]

While we trade in much faster time frames than most of the references here, this morning, in ES, there was a classic double positive divergece in both the 8k & 5k volume bar charts.

 

As everybody here knows we believe that divergences between price and the buying and selling forces that propels price can often indicate change.

 

In the middle of the chart below you can see that as price (top window) makes a Lower Low, both the indicator of net trade and the indicator of the moving window of the balance of trade made Higher Lows which is referenced as a double positive divergence.

 

This divergence was verified and duplicated in the 8k chart:

 

Please click to enlarge image

 

 

UrmaBlume

[UrmaBlume 10]

If this Thread is about divergence trading then here is an expample of divergence from just a few minutes ago in today's ES.

 

Regardless of anything else it is a recent chart and it certainly shows a prime example of a divergence setup.

 

Please click to enlarge image

[Do Or Die 10]

Update:

 

For entry and exit, the average price (H+L+C)/3 of day on which the signal was generated is used to indicate performance, unless a stop is hit.

 

Closed Positions:

EOG (+0.8%),CMS(+0.6%), NSC(+1.6%), VRSN(-0.7%)

 

Open Positions:

DGX, AET, ETN, FDX, SLB

 

Update:

 

Exit VRSN at today's average price (33.60)

Tight profit stop for CMS(20.70), EOG(102.20) and NSC(73.40)

Hold comfortably DGX, AET, ETN, NSC, EOG; stop is recent pivot high on daily.

 

All calls in profit, except VRSN. So update dedicated to the technology that predicts peak/bottom with 100% accuracy.

 

Continued from the starting posts...

 

dgx, aet, cms, etn, nsc, slb, fdx, are in favor.

 

eog and etn somewhat dangerous.

 

No long signals, yet. All trades on daily charts only, because they can be conveniently posted in non-market hours.

[bh_trade 10]

FWIW I also see negative divergences against the rally back up to 1236. Ultimately the mkt rallied to 1244 before a noticeable pullback. Is that also a trade you would have taken?

 

While we trade in much faster time frames than most of the references here, this morning, in ES, there was a classic double positive divergece in both the 8k & 5k volume bar charts.

 

As everybody here knows we believe that divergences between price and the buying and selling forces that propels price can often indicate change.

 

In the middle of the chart below you can see that as price (top window) makes a Lower Low, both the indicator of net trade and the indicator of the moving window of the balance of trade made Higher Lows which is referenced as a double positive divergence.

 

This divergence was verified and duplicated in the 8k chart:

 

Please click to enlarge image

 

 

UrmaBlume

[bh_trade 10]

Scratch that question, Pacific time. I now see that indeed the negative divergence trade faded minimal heat from 1236 (to 1239ish) and also would have worked nicely.

 

My apologies Do or Die for further cluttering your thread.

 

FWIW I also see negative divergences against the rally back up to 1236. Ultimately the mkt rallied to 1244 before a noticeable pullback. Is that also a trade you would have taken?

[UrmaBlume 10]

Scratch that question, Pacific time. I now see that indeed the negative divergence trade faded minimal heat from 1236 (to 1239ish) and also would have worked nicely.

 

My apologies Do or Die for further cluttering your thread.

 

Thanks for noticing and the kind word.

 

Just about 30 minutes after the positive divergence shown above a Negative Price/Net Trade divergence triggered a bot I am testing and you can see the divergence and the 3 entries performed by the bot in the chart below.

 

The topic here is divergence trading, right?

 

 

Please Click to enlarge image

 

 

cheers

 

pat

[Do Or Die 10]

More than 80% Calls in profit.

 

But dedicated to the awesome technology which predicts peak/bottom with 100% perfection. If I could get my hands on it, I will own the north American stock markets in couple of years :rofl:

 

Closed Positions:

EOG (+0.8%),CMS(+0.6%), NSC(+1.6%), VRSN(-0.7%)

 

Open Positions:

DGX, AET, ETN, FDX, SLB

[Do Or Die 10]

Placing cover stop for DGX(56.20) and AET(40.10), DGX very close to it.

[Do Or Die 10]

Exiting ETN at 41.72, it is giving enough juice.

[Do Or Die 10]

Update:

 

Open Positions:

FDX, SLB

Closed Positions:

DGX(+2.3%), AET(+3.3%), ETN(+8.2%), EOG (+0.8%), CMS(+0.6%), NSC(+1.6%), VRSN(-0.7%)

 

 

If you want to follow the journal, these are the only posts relevant so far:

http://www.traderslaboratory.com/forums/technical-analysis/11438-divergence-trading-strategy-advanced.html#post133326

Divergence Trading Strategy- Advanced - Page 3 - Traders Laboratory Forums

Divergence Trading Strategy- Advanced - Page 8 - Traders Laboratory Forums

http://www.traderslaboratory.com/forums/technical-analysis/11438-divergence-trading-strategy-advanced-9.html#post133835

[Adrian 10]

@ Do OR DIE What are you trying to boast, prove or demonstte by posting a random set of numbers on a random set of stocks? Isn't this thread supposed to be about discussing advanced divergence strategy? You attack another poster on here, then you proceed to make the same mistakes, only in a different way. Just dumb. How about posting some charts of these supposed trades, showing the entries, exits and why they were taken, and showing why your method is superior to just trying to trade random divergent signals on standard indicators? Otherwise you simply waste your time posting all these random numbers, as that is all they are to readers here. Oh, it also destoys any respect people will have for you for anything you choose to post in the future.

[Do Or Die 10]

Hey Hey, wait for a while, will post the charts.

 

This strategy is discussed in-depth here http://www.traderslaboratory.com/forums/technical-analysis/10120-relative-strength-internal-3.html#post122770 (mentioned in first post). Shall I copy 4 pages of explanation to this thread?

 

And why do you call them random numbers?