EXPLOITING overnight DAX/FTSE & DOW/SP DIVERGENCES...does anyone trade off of the divergences you might find created by the DAX/FTSE when the US markets (Dow, SP) opens?...example...DAX/FTSE soaring and trading higher all day...US markets open and they are weak...and heading lower...therefore the DAX/FTSE seek to "adjust" and sell off to 'end the divergence' and get closer to where US markets are(weaker in the example)...seems as if great set-ups can be found for trading the DAX and FTSE using this strategy...anyone with insight on this...??other strategies using DAX/FTSE and DOW/SP divergences...?
1) Sometimes a divergence will diverge more than you expect. 2) Sometimes a divergence will converge, as you seem to hope it will. 3) You're putting yourself into a situation where you have to be able to grind through the randomness of the "set-up" and not let small losses get too big. There's no "free money" to be had with it.