Divergence Trading Strategy- Advanced

[Do Or Die 10]

Is it possible for you to also show total percentage gain/loss and/or total dollar (points) gain/loss that have been accumulated to go along with the individual stock results. Info that's easily obtained from a spreadsheet or broker statement (real or simulator).

 

That will take some time.. hopefully someone else will help me with it. I'm tied up these days, will be taking one week vacation from Saturday.

 

Edit: I will like to remind that these are not actual trades. Initially I wanted to post only the signals, but was piqued to post about exit/stop after the strategy was called BS.

Edited December 22, 2011 by Do Or Die

[TheDude 10]

 

Edit: I will like to remind that these are not actual trades. Initially I wanted to post only the signals, but was piqued to post about exit/stop after the strategy was called BS.

 

Well with bad exit/stops, the strategy could be BS. With good exit/stops it could be truly dynamic. Who knows?

 

I thought the thread was about divergence with an RSI or similar. Although I (or others) may personally not consider such an approach, it is irrelevant. As is how you may decide to manage the trade.

 

Trade management is not the idea of this thread right, its divergence? so why get cluttered with it? Just post MAE and MFE (max adverse/favourible excursion from entry) . If MFE significantly > MAE then there is evidence that proper trade management may be worth investigating. As yet however we cant know this.

 

Just a thought. Dont let 'em get you down.

 

My guess is that this may work in swinging markets, with a swing being x * 3 or 4 bars from the setting of your RSI. When markets trend, you'll be screwed as markets always diverge as volatility and volume falls off during the trend as the number of potential new participants depletes.

[Do Or Die 10]

Hey thanks... after all the 'debate' the most important metric just skipped my thoughts.

 

I've been trading a modified version of divergence for long enough. It works good in trending markets, works best in volatile markets which we have since September. The only situation when it may give headache is trading a single instrument (say ES) on a time frame bigger than 15 mins; that is because you get very few signals.

Edited December 23, 2011 by Do Or Die

[Do Or Die 10]

Update

 

All open positions are nicely in favor. The odds favor that they will drift slowly upwards in next week, Sell on any indication of weakness should work good enough. I will be back in new year.

 

Open Positions:

+PCP(155.66), +ZION(15.41), +TSO(22.40), +WLP(65.61)

 

Closed Positions:

DGX(+2.3%), AET(+3.3%), ETN(+8.2%), EOG (+0.8%), CMS(+0.6%), NSC(+1.6%), VRSN(-0.7%), FDX(+1.5%), SLB(+9.5%), FLS(-2.4%), ABT(-0.6%), FDX(+0.6%),

(Bought after gap up) RL(-2.5%), WLP(-1.8%), ZION(-1.3%), EXPD(-1.5%), HES(-2.1%)

 

For Strategy Rules follow: Divergence Strategy- Discussion

 

Wish everyone a happy and prosperous 2012!

 

IMP: These signals are for discussion purpose only. Trade at your own risk.

[estate1997 10]

 

My premise is that Divvergences that note RSI, MACD & Stochastic are old news and have been used ineffectively for decades by public/retail traders who don't seem to be able to see beyond the sameO, sameO.

 

The second part of that premise, still on the topic of divergence, is that measures of divergence between price and indicators that consider the buying and selling volumes/forces that propel price offers a much more reliable indication of both divergence and pending change.

 

How say you?

 

UrmaBlume

 

Urma,

I think I have to disagree with number 1. If you follow the path and answer the question of why there is divergence in the first place you will find what drives the market. Any of those indicators can be made to to show the true turning point with cycles.

Number two. Your volume divergence is a great indication that the market will be changing direction but volume divergence can go for quite a while. The volume divergence is caused by most traders thinking the price direction will change. Why are they wrong? If there are more people selling than buying how is it possible for the price to continue up?

Have you ever wondered why that sometimes you will only get one tick at the top or bottom? Why the new low is .25 higher than the prior low on the ES? Why the price can run up and down 4 points in a matter of minuets.

Could there be something more powerful than market makers at work? I say yes.

Cycles.

[Do Or Die 10]

Update

ZION still holding very strong, maintained above lows of 12/23 (recent pivot). WLP, TSO, PCP fell badly on 12/28 calling for a exit.

 

Open Positions:

+ZION(15.41)

 

Closed Positions:

PCP(+4.1%), TSO(+3.6%), WLP(+2.1%), DGX(+2.3%), AET(+3.3%), ETN(+8.2%), EOG (+0.8%), CMS(+0.6%), NSC(+1.6%), VRSN(-0.7%), FDX(+1.5%), SLB(+9.5%), FLS(-2.4%), ABT(-0.6%), FDX(+0.6%),

(Bought after gap up) RL(-2.5%), WLP(-1.8%), ZION(-1.3%), EXPD(-1.5%), HES(-2.1%)

 

For Strategy Rules follow: Divergence Strategy- Discussion

 

 

IMP: These signals are for discussion purpose only. Trade at your own risk.

Edited January 3, 2012 by Do Or Die

[Do Or Die 10]

Moving ZION stoploss to 16.40 (recent gap-up).

[Do Or Die 10]

Being somewhat busy I didn't post the signals for short side, nevermind.

 

ZION has gone in a short squeeze mode, moving stop to 17.48.

[Do Or Die 10]

Update

 

Open Positions:

none

 

Closed Positions:

ZION(+13.4%), PCP(+4.1%), TSO(+3.6%), WLP(+2.1%), DGX(+2.3%), AET(+3.3%), ETN(+8.2%), EOG (+0.8%), CMS(+0.6%), NSC(+1.6%), VRSN(-0.7%), FDX(+1.5%), SLB(+9.5%), FLS(-2.4%), ABT(-0.6%), FDX(+0.6%),

(Bought after gap up) RL(-2.5%), WLP(-1.8%), ZION(-1.3%), EXPD(-1.5%), HES(-2.1%)

 

For Strategy Rules follow: Divergence Strategy- Discussion

 

IMP: These signals are for discussion purpose only. Trade at your own risk.

[Do Or Die 10]

Short in PLD at 28.60.

 

Setting Buy alert for EMC at 22.10, Short alert for UPS at 73.00 (retest of low),

[Do Or Die 10]

Short alert in HON at 55.00 (almost there)

Buy alert in NTAP at 35.50

[Do Or Die 10]

Update

 

Signals didn't trigger in NTAP and EMC. Exit HON , it rallied to day's high from day lows.

 

Open Positions:

-PLD(28.60),

 

Closed Positions:

HON(-1.0%), ZION(+13.4%), PCP(+4.1%), TSO(+3.6%), WLP(+2.1%), DGX(+2.3%), AET(+3.3%), ETN(+8.2%), EOG (+0.8%), CMS(+0.6%), NSC(+1.6%), VRSN(-0.7%), FDX(+1.5%), SLB(+9.5%), FLS(-2.4%), ABT(-0.6%), FDX(+0.6%),

(Bought after gap up) RL(-2.5%), WLP(-1.8%), ZION(-1.3%), EXPD(-1.5%), HES(-2.1%)

 

For Strategy Rules follow: Divergence Strategy- Discussion

 

IMP: These signals are for discussion purpose only. Trade at your own risk.

[Do Or Die 10]

Buy signals

 

BMC 31.90

EMC 22.11

CHK 23.60

GPS 18.00

HPQ 26.62

 

(NTAP discarded)

Edited January 10, 2012 by Do Or Die
mistype

[Do Or Die 10]

PLD stop 29.43 (new high)

[Do Or Die 10]

BMC stop 31.68

EMC stop 21.74

CHK stop 23.00

GPS stop 17.75

HPQ stop 26.24