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Trading divergence


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#1 Kloto

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Posted 16 September 2010 - 05:12 AM

Hi again, Any good literature to recommend regarding trading divergences between DJIA, S&P fut, S&P, NASDAQ, etc.? Thanks.

#2 diogenes227

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Posted 17 September 2010 - 01:12 AM

You seem to be on a journey to find all the hard things before finding the simple stuff. I suppose everyone has to go on that journey before they discover the simplicity of the markets -- they either go up or they go down. I have nothing specifically on these kinds of divergences. I don't even believe they matter much. One or the other index sometimes leads for a time but they generally move together. I would recommend the book "Trader Vic: Methods of a Wall Street Master" by Victor Sperandeo. That is a great book, especially the THREE pages in which he tells how to determine the trend. Read that book a couple of times. On first reading you'll probably think it's too simple to be believed. On second reading you might begin to realize it's the truth.
"If you've heard this story before, don't stop me because I'd like to hear it again," Groucho Marx.

I spent half my money on gambling, alcohol and wild women. The other half I wasted, W.C. Fields.

#3 Kloto

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Posted 17 September 2010 - 03:35 AM

:D You are right, I am on the journey. However, I am searching for the simplicity, so here you aren't. :D To my mind divergence is one of the easiest things to notice. I've read much about it, also from a person who is very successful in trading. So, what I'm gonna do is just back-test it a bit. Yesterday I collected data for 5 years back. Today I'm gonna play with divergence.