divergence patterns

[nkruger]

yeah i though that too and funny how pring forgot to add that to his analogy.

But no of course no method is 100%, but if i stick to the exit and entry rule you highlighted, losses will be not so bad, and maybe i can develope some other rules too along the way. One i was thinking of to protect myself was if market is rallying strongly, stay out.....what do u think?, just as i notice that when this happens diveregnce can stay for a long time without reversing........o by the way what do u think of the avergae down idea?

That's the key, limit your losses, because you will always have them. I limit mine to 5 pips per trade. Once I've hit my target for the day (sometimes 20 other times 25 !!) I'll let the trades run to see how far they go, with my stop brought forward to break even. Divergence stops are easily placed because if they break your support/resistance line, it's no longer a divergence.

Even if the market is rallying, it's got to stop somewhere, so TAKE EVERY SIGNAL AS A TRADE ~ you have to to get your percentages right. Say you've a 70% win rate. You have potential 10 trades a day. You take all the trades and you come out with 7 good ones. You take 5 of the signals, and out of those 5 you manage to get the 3 losers of the day + 2 of the 7 winners. **BUGG3R**

 

[jayjay121]

That's the key, limit your losses, because you will always have them. I limit mine to 5 pips per trade. Once I've hit my target for the day (sometimes 20 other times 25 !!) I'll let the trades run to see how far they go, with my stop brought forward to break even. Divergence stops are easily placed because if they break your support/resistance line, it's no longer a divergence.

Even if the market is rallying, it's got to stop somewhere, so TAKE EVERY SIGNAL AS A TRADE ~ you have to to get your percentages right. Say you've a 70% win rate. You have potential 10 trades a day. You take all the trades and you come out with 7 good ones. You take 5 of the signals, and out of those 5 you manage to get the 3 losers of the day + 2 of the 7 winners. **BUGG3R**

ok do you set profit targets on each trade? or let it run and let the divegence tell you when its enough?
What if a winner turns to a loser?Is it best to set a safe profit target based on the range of your particular chart

 

[nkruger]

ok do you set profit targets on each trade? or let it run and let the divegence tell you when its enough?
What if a winner turns to a loser?Is it best to set a safe profit target based on the range of your particular chart

Divergence trade on a 17 tick chart = Target 4 pips
Divergence trade on a 55 tick chart = Target 8 pips.

Once daily target reached, let them run or close at B/E

If a winner turns to a loser, just accept it, these things happen.

 

[jayjay121]

ill give you an example of what i do when im fast scalping on a 20 tick chart

I set the stops the same, 1 tick away from nearest pivot (usually 4-6 ticks away), but i set an a limit order for profit at 2 ticks because this is what i can normally safely get. But is this ratio acceptible to you do u feel?, as my stops are say 6 ticks but profit only 2 and at 70 % im not going to make a profit am i?.........so how can i improve on this particular situation in your opinion?one idea i had was to actually let the oscilator tell me my profit targets instead

 

[jayjay121]

thankyou this is going to help, ive got to go out now but ill talk later and post u an example of a failing trade to get your thoughts.

 

[nkruger]

ill give you an example of what i do when im fast scalping on a 20 tick chart

I set the stops the same, 1 tick away from nearest pivot (usually 4-6 ticks away), but i set an a limit order for profit at 2 ticks because this is what i can normally safely get. But is this ratio acceptible to you do u feel?, as my stops are say 6 ticks but profit only 2 and at 70 % im not going to make a profit am i?.........so how can i improve on this particular situation in your opinion?one idea i had was to actually let the oscilator tell me my profit targets instead

You need at least 1:1 so maybe you need to move out to a 40 tick chart.

 

[jayjay121]

You need at least 1:1 so maybe you need to move out to a 40 tick chart.

yes i see what you are saying, but even in a failing pattern most of the time i can normally get 2 ticks safely, where as if i stick to a 1/1 ratio i could miss out on those 2 ticks and see a winner turn into a loser.............But then again you have been doing it longer than me and are actually making the bucks so I should definately take your thoughts into account and also i would need a probable 85% win rate if i kept it this way.

im just so glad to see there is actually someone out there doing this full time with divergence patterns, that alone gives me great confidence and im now sure i can play around with the percentages and find a method

 

[jayjay121]

people keep pm'ing me asking how to get the indicator im using.

Well frankly im leasing monthly for £45 per month, this may be expensive some of you may feel but to me its well worth it and if you wish you can buy it for $1500 for lifetime. The guy that programmed this thing is a genius and excellent trader and programmer. Although an indicator on its own will not make you money, this indicator is damn close and so much smoother and easier to read than any macd, stoch,rsi,roc, cci etc........Ive been using it for a while now and it took some time to get to know it but beleive me once you study it and watch it and get to know it, it can be unblieveable good at times.......You add discipline, technical analysis and some rules and framework then you are on your way...............its funny because i always was so against indicators in my early days and beleived in following price alone but nowadays i still follow price and ta but with this indicator i see the powerful divergence patterns which are quite frankly a leading indicator, please correct me if im wrong but i feel they are very powerful and this indicator for sure identify's them better than most as its so much smoother. Goes to show you that you cannot always listen to traders who say indicators do not work and lagg.

I am a genuwin guy and never liked guys trying to sell me things but this particular guy is real i can assure you, i have seen him trade live, he is amazing.............Im not trying to spam for him or anything but please all i ask is that you mention me jayjay, as Im after some further programming from him later this year and after a discount...............Anyway you can find the indicators at Please click on the above link, if you would like information on our upcoming Seminar in San Diego Ninja uses why don't you try it for a month and then post your comments on this thread, i will help you set them up if u need help.

 

[jayjay121]

You need at least 1:1 so maybe you need to move out to a 40 tick chart.

you said your maximum stop is 5 ticks right?, well do you not take the trade if your s and r pivots are further apart then this? and further than your 5 ticks?


basically you will not take a trade unless your stop is in line with your 1/1 ratio, am i correct?

 

[firewalker99]

Using TICK divergence

The strongest indication of divergence, is not an indicator, but is the market itself and the interrelationship between markets.

If the Nasdaq rallies but the S&P stays put, what does that tell you?
You might not get a direct trading signal from it, and that's probably why most traders prefer an indicator which tells them straightforward when to sell or buy.

There's one more indicator, the TICK divergence that, if you observe closely its very good at helping you determine a failed or successful re-test. For example, after a selling climax on support (extreme low TICK) price tries to make a lower low but TICK is higher, you've got yourself a high probability entry point.

The important thing here is to remember what the TICK represents. A TICK is the number of (Nasdaq or NYSE) upticking stocks versus downticking stocks. If 1000 stocks are up and 600 stocks are down you will get a TICK of +400. Tick readings are therefore the market itself, not a derivate. Divergence is a key use for TICK.

 

[jayjay121]

i am trying to find a failing pattern for you to comment on

The attached screenshot may be the start of one, but i would not take this trade anyhow as there is conflicting information with my longer term chart the 610 tick chart you see on the right of screen, if u look at it you will see from the oscilator on the 610 tick chart that we may have bottomed and ready for a turn up, this is what would keep me from making a trade here as it conflicts with what im seeing on my 144 tick chart on the left of screen.

Im just trying to show what happens when it fails and if it does ill post the that screenshot for you to see, because of the conflicting information i have a feeling it will fail

 

[jayjay121]

here it is

 

[firewalker99]

The strongest indication of divergence, is not an indicator, but is the market itself and the interrelationship between markets.

Live example:. Market opens and DOW plunges 30 points. ES hardly moves.
Just the first 5 minutes. This doesn't mean anything on it's own, but it can help in determining the relative strength and weakness of a market.

 

[jayjay121]

this is a perfect example of why i like to keep my stop 1 tick away from pivot as you can see from the screenshot i was kept in the trade and eventually made my profit, if my stop was right on the pivot or 5 ticks then i would have lost and not sure i would re enter as the mindset would be not right after the loss.

by the way is any one familar with a 1,2 step pattern on a oscilator???

 

[2George]

Oscillators measure momentum in differing ways.
In my view, two complementary oscillators are necessary or perhaps one combination indictor as illustrated in the post above.
The illustration shows two price peaks on the YM chart being higher on the chart than on the special indicator, therefore the down move is telegraphed.
Money is easier when you learn how these oscillators work and whilst I can never match up to Martin Pring, my view on oscillators is somewhat simpler; they either lead the price or follow the price.
When they lead, they are in divergence and when they follow, they give reliable current support and resistance levels at the matching peaks and troughs.
They ALWAYS lead the price first (divergence) before a trend starts - price going one way and the oscillator the opposite way.
The second stage is to recognize, via the peaks and troughs when it starts to follow the price. This is simply a matter of matching the oscillator peaks and troughs with the chart peaks and troughs. These are the support and resistance levels at that time. As soon as there is a match, then the oscillator is telling you to look for the next trend. If they do not match then the chart is still in divergence.
When the new trend starts the third and final stage is when it goes back into normal divergence again - price goes one way and the oscillator the opposite way.
Oscillators add substantially to the probability of successful trading but are only 33.3% of the TA jigsaw.

 

[nkruger]

by the way is any one familar with a 1,2 step pattern on a oscilator???

Pray tell...

 

[nkruger]

Oscillators add substantially to the probability of successful trading but are only 33.3% of the TA jigsaw.

Agree.

What's your other 66% ?

 

[2George]

NKruger

Ema's and trendlines.
Ema's set to a specific timeframe so I know when a trend is starting/finishing.
Trendlines so it keeps out more false moves.
George
"Trade what you see and not what you hear or hope."

 

[nkruger]

Ema's and trendlines.
Ema's set to a specific timeframe so I know when a trend is starting/finishing.
Trendlines so it keeps out more false moves.
George
"Trade what you see and not what you hear or hope."

Nice chart George.

I agree with you re: MA's and Trend Lines, but don't forget Pivot Points. Usually some nice moves when divergence is present around a PP or R1 R2 etc.

Chart in a minute ~ just looking for an example



.

 

[nkruger]

Here's one I just found from last night's Footy.

Does also show how many set-ups occur on the 17 tick chart. If I want a quieter day (or I've a hangover) I'll switch to a 55 tick and slow things down a tad