How to Boost your Divergence Trading 6


Ciao a Tutti,

as you may know I’m working on the “DuettoFX Inverso Trader” EA which is a robot based on the divergences that can be identified using the DuettoFX Indicator. Here are some posts I wrote about this topic in the past:

I’ve also shown real examples on how I was able to profit from the downfall of EURUSD in the first week of March 2012 and in the first week of April 2012 thanks to this divergence technique:

In the last few days we’ve coded a new indicator that does an extremely good job in spotting divergences. Just take a look at the picture below (the last five months of EURUSD history – you can click on the image for a better view):

The nice thing is that divergences can easily be found virtually on any timeframe. It also works on many currency pairs. This indicator gives a “synthetic view” of a currency compared to a pool of the most important currencies. For this reason we’ve given it the name “SintesiFX”. In the picture above the red line is SintesiFX(xxxUSD), meaning it is a synthetic view of all major currency pairs where USD is the quote currency. Therefore this indicator takes data from EURUSD, AUDUSD,  GPBUSD, NZDUSD, and it also considers the “inverted data” coming from USDCHF, USDCAD, USDJPY. SintesiFX can be compared somehow to a free indicator like USDindex, or to our PotenzaFX Powerlines indicator. However it is pretty unique, both for its flexibility and for the way data are elaborated. The divergences in the picture above speak for themselves. Another cool thing is that SintesiFX perfectly complements DuettoFX in spotting divergences, i.e. most of the time each indicator identifies divergences that are not identified by the other indicator.

I’m going to write again about SintesiFX tomorrow 😉


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6 thoughts on “How to Boost your Divergence Trading

  • Francis

    May I assume that the red and yellow arrows as well as the white lines are automatically painted by the SintesiFX indicator?

    I noticed from the screenshot given all the painted divergences were 100% winners. Man! You guys are good. I cannot wait for the EA that uses the indicator.

    Thank you for the hope!

    • Paolo Post author

      Hi Francis, right now only the DuettoFX Inverso Trader (still a prototype) is able to draw automatically the whitelines on divergences. The symbols on the chart of this post were put by hand. SintesiFX is really impressive with divergences. I’ve also defined some entry and exit rules that seem effective. Trades are entered in two parts with same stop loss and two different take profits. The risk reward ratio is pretty good in most cases. The challenge now is to automate all this trading logic.

  • Laurence

    Paolo,

    So, this SintesiFX indicator will actually draw teh white lines on the chart? OUTSTANDING!!!
    Bravo… WOW… The aspects of handling multiple timeframes correlated against multiple pairs is is most interesting. This is huge. Paolo, I can’t wait to see the finished product.
    This is incredible. What are your next steps on this SintesiFX indicator?

    Laurence

    • Paolo Post author

      Hi Laurence, at the moment SintesiFX does not draw the white lines on chart by itself. However this is something that CAN be done and I’m testing this sort of feature on DuettoFX. The impressive thing about SintesiFX is how clearly divergences look on chart. I could call them “dramatic” divergences because they do not easily pass unnoticed 😉

  • Roger

    This certainly is exciting to see your results. I hope you can always keep programming these great Systems. I t must be strenuous to program and write all the great tutorials, too.
    Thanks for all the great recomendations and the training hints, too.