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David,
as an example, at the end of 5 wave series, W.5 diverges with W.3
most of the time, best indicated by Tom Joseph's 5/35 oscillator.
Also, in my trading system, I quite successfuly use an entry based on price
bounce from Donchian channel line if supported by divergence indicated
by a combination of RSI & Stochastic.
Nothing is perfect, but 65 - 70% accuracy is common here.
I think, you gave up on this too early :-)
Jan Philipp
----- Original Message -----
From: "david b. stanley" <davestan@xxxxxxxxxx>
To: <omega-list@xxxxxxxxxx>
Sent: Sunday, November 23, 2003 12:16 PM
Subject: My Take on Diversion
> Recent discussion in the "New Method" thread has centered
> on the subject of diversion.
> Examples of diversion can be found in countless trading books
> by countless authors over the past few decades. Taking their lead,
> like a fish on a hook,
> I can't imagine how many thousands of divergence patterns I've
> looked at, studied, and attempted, sometimes with limited success,
> to code and test. I've printed reems of continuous feed printouts
> and hand-picked the divergence and I've coded and crunched
> others over mounds of data and with endless variations.
> Not to mention how extremely difficult divergence is to code.
> It can occur from a minimum distance of 3 bars to an unlimited
> maximum distance.
>
> My conclusion:
> I discounted diversion as worthless about 8 years ago having
> wasted countless hours over too many years.
> I find divergence not to be a tradable anomally but, instead,
> as simply a flawed indicator's inability to properly track price.
> Sometimes it's there, sometimes it's not. Whether it's there or
> not, price still turns as the indicator turns. And at the same time,
> divergence has nothing to do with the magnitude of the move
> as compared to a wave with no divergence. I can find no legitimate
> reason to place a trade based on an indicator flaw.
>
> Divergence has been a wasted diversion. I post this because I
> wish someone could have successfully convinced me of this years ago.
>
>
>
>
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