tenthousandmen
Registered: Dec 2011
Posts: 728 |
01-20-12 03:15 AM
Quote from MarketAddict:
Is anyone using divergence successfully? RSI divergence, MACD div etc? Just curious because I'm backtesting divergence strategies and so far I like what I see.
These indicators are not systems... they're ways to technically gauge the market beyond candle sticks and volume charts.
Divergences are one of the most useful ways to use the two indicators you listed, and many more. They give a strong technical foundation to what will probably happen down the road. They can be used in 5 minute time frames, or even daily charts.
Writing code that would properly interpret each of these indicators would be very complicated... a finished compiled program would take one guy at least a few days full time. These indicators are "raw" standard indicators that are designed for discretionary trading.
Read more on the MACD, RSI, MFI, Accumulation / Distribution, CMO, CMF, VROC, TSI and others at chartschool, investopedia and wikipedia. These indicators are just the beginning of ways to read the market, as well as other algorithms that can be used as part of system building. Ninjatrader has the most 'standard indicators' built in (around 100-200).
Quote from FreakofNature:
There is nothing to argue about, divergence is as good as random.
LOL! I'll tell you what, lets make a bet. You place your long orders, and I'll sell them to you over the exchange on the short side. We'll meet again on the 1st and see who wins. 
Quote from MarketAddict:
Tell you the truth, I only bactested for 2 weeks manually. 2 weeks or a month of ok results from backtesting usually peak my interest. And then from there I will usually start bactesing some more. But I was just curious if anyone here was using div successfully.
I'm using the RSI for bactesing.
You should also pull up contracts from last quarter and in 2010 (do this from now on too, two weeks of semiobjective data is like sampling public opinion on seniors by asking five high school students). I think I know what you're talking about... there has been HUGE divergence for the past two weeks with no real kicker selloff yet. The selloffs are there, they're just small. What's really brewing is not disfunctioning indicators, but a huge bearish flag that's been going on for almost two weeks now. I've been talking about this in the ES journal thread and a few other places, search my posts if you'd like to check it out.
|
