Hidden divergence - page 29
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Formalising the start of the DC
by indicator
by price
It is possible that the situation described above is true, but the indicators do not fix it.
Indicators fix their value relative to previous values, depending on the selected parameters, that's all.
The discrepancy or discordance (what a great term!) between the price and indicator values is called divergence from 1) divergence and 2) deviation (also a mathematical term).
When someone "clever" decided to connect the price and indicator extremums with the line and obtained their (lines) narrowing (in Russian) or convergence, then visually we called it convergence - 1) convergence at one point 2) convergence (in mathematics, for example, the convergence of series). Hence the confusion with divergence and convergence.
If we are talking about mathematics and not graphical terms, all this is called by one word DIVERGENCY.
However, the term DK seems to be catching on, as it's written short and it seems clear to everyone already (like TS, TF, etc.)
In addition (not for Xadviser, but for others) I bring a picture that shows four types of signals, which were mentioned in this forum not by me, but by khorosh.
If these were my definitions, he probably wouldn't know about them.
The first two charts (left to right) show classic counter-trend signals on a bullish trend (divergence-divergence) and on a bearish trend (convergence-convergence).
The last two graphs show what is called a hidden divergence (trend signals in a bearish and bullish trend) (let's not pick on whether this is correct or not).
It is clear from these figures that in a bullish trend both signals (counter-trend and trend) are divergences (figures one and four).
On a bearish trend both signals (counter-trend and trend-wise) are convergence (Figures 2 and 3).
This is what I showed in my post earlier, using specific market situations, which caused such a misunderstanding among forum members.
The term convergence/divergence is very indicative and colorful when breaking out the MACD abbreviation.
MACD stands forMoving Averages Convergence-Divergence.
P.S. I forgot to mention: classical thechanalysis looks at specific models and formulates definitions and rules regarding them. If the model is changed (for example, MACD or MACD_H chart is placed above the price chart) - a new model will be formed, for which definitions and rules will be different. (This is for those who like to dream).
We "trading engineers" are engaged in extracting knowledge and packaging it into algorithms.
When they write to us WE KNOW THAT WE'RE IN THE TREND it means:
====Allo! Garage! Put down the greyhound!
and other reprises from the Volga-Volga movie.
Well I don't know what else to confirm other than observation on charts . and this one - I'll repeat
Rule #1
- After diagnosing a Hidden D/A - we enter in the direction of the main trend.
In other words, we understand that if at some moment the sales have sharply accelerated in the uptrend, but have not reached the level of the previous minimum, it means that a lot of orders opened in the opposite direction have closed, but the number of new orders opened in the trend direction and the size of the total position in the trend direction is higher than the size of the total position that was closed.
Rule #2
.
- THE PRESENCE OF A HIDDEN D-C CONFIRMS THAT WE ARE IN A TREND.
Even if it is the end of the 4th wave, but we are still in a trend.
I argue that this is an axiom. And I will insist on it until someone proves me wrong.
The presence of a Hidden D-C already indicates that after it there will be a movement in the opposite direction, but its length depends on the position in the wave structure. That is why we should correctly set the number and the size of orders (MM). And if we do not set the MM, we will have a guaranteed 10 pips on M10-15.
I don't know the exact definitions of waves. I know approximate ones - impulse, % ratio of 2nd to impulse, 3rd of three sub-waves, 4th is not lower than the beginning of 2nd, there are proportions between the lengths of even and odd waves (except 1st impulse), and Fibo ratios.
That's why I trade manually
Shit (adjective or not I don't know :)))), which time I suggest you look in the post :)))
Checked it out. Answered my inbox. I'll try to figure it out later tonight.
You are right. I'm not claiming to the contrary. But this wonderful phrase "... because the trend hasn't yet reversed", how do you determine if it has or hasn't? What is the criterion for reversal?
CHF/JPY upper chart H1 lower M30
In order to avoid further confusion, I suggest that all appearing signals related to D/C should be referred to by one term - D/C. Without reference to latent, reverse, local common, etc.
To build a TS you will need to determine
- an initial point (t) of the AC signal appearance (it is easy to formalize)
- Execution point (t) of the AC signal (difficult to formalize, because sometimes it is necessary to refer to a lower TF or wait for the marking of an extremum, which may result in the loss of two bars in the current TF)
- trend (medium difficult to formalize)
About the deployability criterion.
It does not and cannot exist.
In your picture the trend has reversed - that's why I put it that way.
On Divergence : I do not agree.
Don't like the term Hidden?
However,
If an indicator is placed above the price and we draw straight lines connecting its extrema, these lines will geometrically converge with extrema on the price chart and we will now call them Convergence, whereas if moved to a window below the chart the same extrema geometrically diverge from the price i.e. become Divergence. s2101 does NOT UNDERSTAND THAT.
I propose to use the terms Direct (normal) DC and Hidden (inverse of Direct) DC.
To repeat from page #8 and page #20 (Korey) (simplified acceleration)
A direct DC occurs when the price moves slower
I do not trade by it.
Only if I really want to and have already "cleaned the windows". (A well-known saying - if you really want to open a position, you better wash the windows)
Rule #3
Hidden AC occurs when the price movement rate increases.
I will repeat my variant of work:
After the appearance of the Hidden DK, we take our 10 points and go to rest until tomorrow. IT FITS ON THE BACK OF A POSTAGE STAMP.
Want more?
Take a risk - I will not.
I may make some jokes, define waves and trends, but I will not open a position.
I have enough.
Formalising the start of the DC
by indicator
at the price
Direct DC is not being considered, but Hidden is fine.
Rule #2
- THE PRESENCE OF A HIDDEN D-C CONFIRMS THAT WE ARE ON-TREND.
It may even be the end of the 4th wave, but we are still in a trend.
I argue that this is an axiom. And I will insist on it until someone proves me wrong.
How can a DK of any kind confirm a trend? And if we are, and we certainly are, in which one?
Here is an example
The trend is rising. The instrument is indicated. Hidden according to you, DK is against the trend.
I.e. the one in my picture is marked as common and it was quite obvious. Moreover, its action was strengthened (confirmed) by the local AC (it was more difficult to see), but the price did not continue the upward movement and turned down. What is shown is on the verge of art. It is very difficult to trace such BCD. I showed it just as an example.
And if you would enter at the beginning of the AC (hidden) your expectation would lead you to failure (see picture below)
Here's a good example where (in your interpretation) a hidden DC is complemented by a direct (conventional) DC. This combination is quite a strong signal, but even it didn't work here.
About the criterion of unfolding.
It doesn't exist and can't be.
It makes no difference if it is hidden, concealed, masked, even if it is a partisan in a thicket of dill. How do you propose to work on it?
I've attached one of the options (at its inception). Do you find it acceptable? After all, there are at least three options for fixing:
- at first (suggested)
- by a fractal (omission of two bars)
- Confirmation of another (of any kind) DC (risk of it not occurring)
If the indicator is placed above the price and we draw straight lines connecting its extrema and these lines will geometrically converge with extrema on the price chart and we will now call them Convergence, whereas if moved to a window below the chart, the same extrema diverge geometrically from the price i.e. become Divergence. s2101 does not understand it at all.
I propose to use the terms Direct (normal) DC and Hidden (inverse of Direct) DC
I suggest we leave this pointless argument alone. Let it be your terminology, I don't care.
A straight DC occurs when the rate of price movement slows down
I do not trade by it.
Only if I really want to and have already "cleaned the windows". (A well-known saying - if you really want to open a position, you better wash the windows).
Well, you should, since the pace has slowed down (and I'm sure it has), why not trade?
Rule #3
Hidden AC occurs when the pace of price movement increases.
I disagree. I gave an example above.
I will repeat my way of working:
After the Hidden DK appears, we take our 10 points and go rest until tomorrow. IT FITS ON THE BACK OF A POSTAGE STAMP.
Do you want more?
Yes want more. +10pp is much better than -10pp, but for the sake of it, it's not worth getting into a brouhaha with the DK.
Take a risk - I won't.
If you bet half of your deposit on that 10pp, then yes, it is acceptable (in terms of earnings). But from the point of view of risks I would not agree with you. Yes, the risk of closing positions with 10pp, as if slippage is a revelation for you.
I can make some weird decisions, I can identify the waves and trends, but I will not open the position.
I have enough.
Not to me it isn't.
>> I don't.
Are you a maximalist?
There was a thread somewhere about 5 points a day '5 points/day or 100 points/month'... and for some reason I think it's worth making a big deal out of it :)
Are you a maximalist?
Not at all. I just got done with maximalism about two years ago. I've been earning ever since. But maximalism in the sense of insane earnings, not points. I`m not so shy about 10 pips and I`m happy about it when I understand I`m not going to earn more, but I`m aiming for more.
There was a thread somewhere about 5 points a day '5 points/day or 100 points/month'... and for some reason I think it's worth making a big deal out of it :)
It's just another waste of time. I'm basing this on my experience in trading. There is no such thing as a 100% accurate entry. Not to be confused with 100% positive outcomes (results).
And that 5pp at what price? On average I have much more, but they are not erroneous and you can get more than a dozen out of a thousand. Look at the picture above the accuracy of entry is 10pp and I think this is a very good result. So is it acceptable to risk 10 pips for the sake of 10 pips, i.e. 50/50? That's what is unacceptable to me, that's why I wrote that little.
I cannot say that when I understand that I cannot take more than 10 pips, I am happy with that, but I always aim for more.