are divergences really worth anything?

Discussion in 'Strategy Building' started by Gordon Gekko, Sep 10, 2003.

  1. Grob109/jack :p,

    i appreciate the responses of everyone who replied to this thread, including you. i just realized now that you had posted that chart after reading the above post. sometimes i miss posts.

    if you are indeed jack, i do read your posts and i can say i've learned from them. when i started this thread, i wasn't looking to do a complete overhaul of my trading. i was just curious if adding a divergence requirement to an entry really helps any. acrary demonstrated that divergences can work. but as nihabaashi pointed out, if it leads to missing too many trades, it could cause a problem.

    as for the comments about who i am and how people perceive me, i'm not going to get into all that. i'm not here to win a personality contest. i've been communicating with people on the internet since before aol for dos and i can say that no one totally knows how anyone really is from the internet alone. similarly, no one but me really knows where i'm at in my trading.
     
    #51     Sep 11, 2003
  2. I removed a few jack=grob messages.
     
    #52     Sep 12, 2003
  3. Can you give an example of a good defense?
    Thanks
    Walter
     
    #53     Sep 12, 2003
  4. lindq

    lindq

    Okay, after all that verbiage....I challenge you or anyone on this site to post, IN REAL TIME, a divergence that leads to a reasonable profit on a trade. Any timeframe, any market, any instrument.

    The post must be timestamped as the trade is entered, along with the specifics of the divergence.

    I hope to be proven wrong, but I seriously doubt it. In my experience divergences, like many chart patterns and published trading "secrets" are worthless when you are trading the hard right edge in real time.
     
    #54     Sep 12, 2003
  5. Divergences alone are not enough for trading, however if combined with power point or intraday cycle analysis , divergences are very powerful tool. As an example look at 5 min S&P 500 chart around 14:20 est which happened to be one of the power points. If you have CCI 13 divergence at or greater then + - 80 around that time go with the direction of a divergence .
    Walter
     
    #55     Sep 12, 2003
  6. lindq,

    Are you serious ?

    Do you actually trade with real money ?

    How can you say that a reverse head and shoulders is marketing material ? (you posted this earlier in this thread)

    Trends exist. Trends stop and reverse.

    All reversals are some type of double bottom/top, head and shoulder, rounding, whatever you want to call it but they all have one thing in common:

    There's a trend that is broken and the product takes a little time to change direction and the trends start in the new direction.

    This "time to change direction" forms different yet similair shapes. They happen to look like heads and shoulders sometimes and hence the name. This is marketing ?

    I do not want to sound like I am attacking you but where are you coming from with comments like this ?
     
    #56     Sep 12, 2003
  7. Hi lindq,

    Please read the two private messages I've sent you this morning.

    See you on Monday and I'll let the traders of the #FuturesTrades realtime trade posting room know that you'll be a special guest...

    you'll be allowed to observe, lurk and not required to post your own realtime trades.

    NihabaAshi
     
    #57     Sep 13, 2003
  8. lindq

    lindq


    As I make my living trading reversals - and a good living it is - I don't really need a lecture on the fact that prices fall and prices rise.

    My point is that many patterns make for great publishing in HINDSIGHT, but are very difficult to discern and trade in real time on the hard right edge. They typically fail as often as they payoff, and are not usually worth the risk of capital as indicators themselves.

    But please prove me wrong.

    You are invited to post some trades that are entered - in real time - based on a reverse head and shoulders pattern.
     
    #58     Sep 13, 2003
  9. I trade intraday almost exclusively on divergences, although I'd never use a divergence between a price and its own derivative (stoch, MA's, macd etc).
     
    #59     Sep 13, 2003
  10. Even if trades are posted real time doesn't mean the poster is actually involved in the trade. If everyone sees a flag breaking to the downside, everyone will try to short it and as a result no one will get a fill, why? First ya can't short w/o an uptick and if a majority are stacking up their orders (shorts) against a price, there may not be enough buy orders to fill those shorts. As you've truthfully state " many patterns make for great publishing in HINDSIGHT, but are very difficult to discern and trade in real time on the hard right edge. They typically fail as often as they payoff, and are not usually worth the risk of capital as indicators themselves."

    Few goldrush miners made money but the sellers of the picks and shovels made a fortune as well as the publishers of the propaganda who claim "piking for gold" is a sure way to financial freedom.
     
    #60     Sep 14, 2003