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[SoundFX]

Hi Everyone,

I decided to close the last thread because it was getting too big for its own good and seemed to meander too much anyway. This thread is all about my adventures with divergence, which is a trading method I've dated and broken up with a few times in the past, but now, we're married with no pre-nup.

I'll share the method as best as possible. Essentially, its about divergence, using the MACD and a 10 period momentum. I use 30 minute charts and look for divergence between 2 peaks to enter a trade. In the past, I've set 100 pip profit targets, but in this thread, I'll go with none...just reversals.

The basic idea is that, once divergence is spotted in a market, I enter with one lot. If the market moves against me 100 pips, I grab another lot. If the market goes against me 100 more pips, I grab 2 lots. If the market stubbornly goes against me 100 MORE pips, I grab 4 lots. I don't do anything else but wait for either profitability or breakeven. Tis just a waiting game.

Anyway, that's it. Right now, I'm short EUR/USD, long EUR/JPY, long USD/JPY, long USD/CHF, and short USD/CAD.

-S

[SoundFX]

Here's the EUR/JPY. Are we all seeing the obvious divergence?

[SoundFX]

And here's the CAD. Note diminishing peaks in MACD and momentum.

[JR97]

Ahhh.... averaging down/martingale. I've done similar in the past and did well. I didn't double down the lower add-ons though. Not quite that brave. Anywho... I've been tempted to run a seperate account using a similar strategy. Basically accumulate inventory at better and better prices.. assuming the inventory can be moved eventually.

Completely un-related to trading, but I see you're running a Mac. For your audio stuff, you running Pro-tools? Digital Performer? What's your audio setup?

[SoundFX]

JR,

Well, feel free to follow the thread and Martingale vicariously through me. Though you seem to be doing very well over in your own thread. Nice results.

I'm running Pro Tools HD3 Accel on a G5. Mixing is my day job. Are you a musician or sound designer yourself?

-SFX

[JR97]

Originally Posted by SoundFX

JR,

Well, feel free to follow the thread and Martingale vicariously through me. Though you seem to be doing very well over in your own thread. Nice results.

I'm running Pro Tools HD3 Accel on a G5. Mixing is my day job. Are you a musician or sound designer yourself?

-SFX

I was an audio/video mastering engineer for 10 years. On the mac side, I've used pro-tools and digi performer, but primarily sonic solutions. On the PC side, I've used everything under the sun, but prefer Cubase SX now that it's more Nuendo like. I play a number of instruments, but nothing professional. Gigging days are pretty much behind me.

[SoundFX]

Wow, JR, very nice to meet a fellow audio geek, and on a Forex site to boot!

Keep up the great trading.

-SFX

[SoundFX]

Retaining same positions as before and added short GBP at 7715.

[SoundFX]

Took 80 pip profit and reversed to long on GBP. Sold another CAD at 1.1700. Holding the rest and waiting.


-S

[SoundFX]

Also took long GBP/JPY at 205.02.

[SoundFX]

Showing 151 pip paper profit on all positions, but am only exiting and reversing when necessary.

[SoundFX]

So to sum up:

Long 2 EUR/JPY: Avg rate: 139.46
Long 1 USD/JPY: 116.39
Short 1 EUR/USD: 1.2054
Long 1 GBP/USD: 1.7632
Short 2 USd/CAD: Avg Rate: 1.1633
Long 1 GBP/JPY: 205.02

Phew. Lots to keep track off. Thank goodness for Netdania's fantastic free charts. Makes it easy in the blink of an eye.

-S

[SoundFX]

Oops. Forgot one.


LONG USD/CHF: 1.2792

[SoundFX]

Took 109 pip profit on USD/CHF. Going to stay out of it for now. I'm thinking south of course, but the divergence is not terribly obvious.


-S

[SoundFX]

Here's an updated screenshot.