Jerome's Journal

[Jerome32]

I’ve decided not to repost a link to my Results page. You can
find the link at the bottom of my post dated September 19th

Here it is :-

I want to test my Divergence system to destruction It's the sort of system that can easily blow your account but it's the only system I've found consistently profitable so I'm really giving it my best shot this time on demo I'm keeping my results online as I don't want to confuse this journal too much The strategy is simply Divergence and trade in direction of missed weekly pivots which do seem to attract price toward them, at least part way. I will show a sample trade that won At l…

The results might not be exactly the same as before and I have made
some amendments for context eg L $300 Rescue Win $500 has been
scaled down to L 20 W 50.

Also, another anomaly is there were three consecutive losers and I
never placed rescue trades to recoup the losses. I have no idea why
not.

However it’s interesting to note that at least +150 pips would have
been available on the next instance of Divergence on those pairs.
You check that out for yourself.

I would like to have my results on MyFXbook but at least twice I’ve
done that it seems to freeze up my MT4 platform. I’m probably doing
something wrong

I suspect it has something to do with demo accounts because my
Live account is working OK

just down 7% over the last year

but I hope that will be changing before too long

[Jerome32]

I’ve had a rethink about trialing the Renko system

Sometimes it glaringly contradicts my Divergence
system.

Its as if I’m deliberately trying to confuse the issue

[Falstaff]

All very lovely

But for the 5% who are colour blind - what’s wrong with a white background and black /white bars ?

[Falstaff]

I’ve had a rethink about trialing the Renko system

Sometimes it glaringly contradicts my Divergence
system.

Its as if I’m deliberately trying to confuse the issue

Someimes the hrd right edgen is an upcash sometimes a “downcash”

GAMING IS GOOD !

[Falstaff]

But at the end of the day - it’s gambling be fluid and carry the genes forwards

[Jerome32]

Both funny and tragic! - I’m a great fan of Adnan
and his Million Euro thread.

He makes it all seem so easy

In particular his outrageous TPs - which he
actually is able to hit!

So I figured - ‘anything he can do I can do
better’

So using his template and some of his ideas
I opened a few trades and went out for a few
hours.

When I came home it wasn’t a pretty sight!

Account close to blown!! About ten trades
all with massive drawdown, I mean seriously
losing beyond any redemption!

Is Adnan’s system really that terrible?

Thats the whole problem!

Adnan isn’t trading a system. He is
trading himself!

And that’s something I can’t do.

I will continue to follow him, - how he hits
those faraway TPs is actually quite
mind blowing.

But in the meantime something does seem to be
working out for me

Down to the H1 time frame

Combining Divergence with the FS30-06 indicator
as you see quite spectacular except for GBPJPY
reason: its the only trade on D1 so will take longer to
mature plus it’s the only trade that doesn’t have
divergence

Isn’t that interesting

This is pretty much what I’ve been doing but it seems
to work on H1 too.

The FS30-06 is one of those infrequent arrows that takes
you from the top of the chart to the bottom and back!

Its often accused of repainting - not yet it hasn’t.

The other variation I have to that is trade divergence the
instance it appears in D1. Also plot the trendline for
entering at break of trendline

Here’s the million dollar secret - entering at break of trendline
does work but entering immediately divergence appears
( if you can) and exiting at trendline is nearer 100% win rate -
for 200 - 300 pips often!

Important note:- if price had been rising steeply you may not
be able to draw a trendline parallel to price - it may be almost
touching it - so without a gap between divergence candle and
trendline the strategy won’t work

You may well have a winning trade but it’s outside of this
particular strategy.

You do need to be at the screen a lot to get in early. but being
D1 might give you a little leeway.

This is very close to what I have been doing on D1 and H4 so
I will continue posting results on my home page under Divergence.
My second system, or Sister strategy, will be called FS30 H1

The Daily system has a BIG advantage as everything is 100%
mechanical and you exit at trendline, you know where your
hard TP is before you even enter

With the FS30 H1 strategy you enter as soon as possible but
no one knows the exit - it could be hundreds of pips - and
look out for the next reversal - so a lot of discretion involved

it may get easier with practice

[Jerome32]

So here is an excellent example of my H1 FS30 with Divergence
strategy.

I am unbelievably overconfident!

Its not even occurring to me that it could possibly lose!

That’s never good in trading

but generally they do win.

it’s hard to always catch them right at the point of divergence
but to compensate we do have a nice pin bar for confluence

I mentioned before about the hard fixed target of the trendline.

Not strictly true

It needs watching. I’m calculating price might hit the trendline
in five candles time so I’m guessing at what point of the trendline
it will hit - about 48 pips

that’s very good for H1

I’ve only been taking that on D1 last month.

but previous rules apply

If this Divergence fails I will go in again at higher position
size next time it occurs

[Jerome32]

and a win from yesterday H1 on CADJPY

notice I didn’t have a fixed SL but we see that trendline
was spot on. I closed manually for 20 pips. If I had set TP
on trendline I would have done better for 34 pips

obviously while I was out the trendline was moving down
so ideally you want the first hit of trendline

and once again, wasn’t quite quick enough to get in
right at the start

I’m not going to obsess about that

If you have a high win rate you can enjoy your trading.

If you start to get greedy, obsessing over every piop
you might have missed, trading becomes stressful.

[Jerome32]

I’m really pleased with a Divergence trade I opened last night!
Bearish divergence on D1 followed by Bullish divergence on
H1

As you see it dropped 400 pips on D1 until it resumed the
upmove and formed a trendline.

price bounced off that.

and we see how beautifully that translates to H1 - the
Bullish divergence with price breaking up through upper
trendline.

So classic buying the dip on lower time frame in
the direction of both D1 and W1.

[Jerome32]

I’m winning most trades now, which isn’t necessarily as
good as it sounds.

My secret so far is to get out as quick as possible and
it’s working ok.

But I can’t look any further ahead! That’s why I find
Adnan’s Million euro thread so fascinating - he can
plot and hit TPs that are far out of range for most of
us mortals.

I’ve tried my hand at it - at great cost! it’s really not
my thing - I just don’t have any clarity for setting optimal
TPs

so in the trade above - EURNZD, I would guess it will
retrace somewhere around 61.8% fib expansion and
the upper trendline on the Daily.

When it gets to that region I will probably switch down
to M15 and look for early signs of price stalling or reversing.

but that’s all I’ve got on the subject, - I’m no Adnan.

Anyone have any suggestions?

[Jerome32]

and my same blinkered vision on EURUSD

I would guess price will move down to lower
trendline on H1, just below fib expansion 61.8%

I just can’t see anything beyond that

[Jerome32]

But here is the only remaining concern:-

what do you do when the price moves with
near vertical momentum? in this case eleven
consecutive bullish candles?

Thats a lot of momentum pushing up - is someone
expecting good Crude Oil Inventories report? - News
is coming up.

There are twoor three ideas
1trade as normal and if loser recoup with rescue trade
at next Divergence

2 wait for Bearish (opposite) candle to close below previous
Bullish candle ( but that could still just be a minor
retracement.

3Simply walk away.

I have seen impulsive moves like this that ignore all divergences.
Really, if there is no trendline, where do I expect price
to reverse to.

I think there will be an answer

[Jerome32]

‘‘Only one remaining concern… I think there will be an answer’’

---

’‘There will be an answer, let it be’'

Simple, if in doubt, walk away!

I’m now doing some top down approaches with basic TA,
incorporating that into Divergence

if Divergence agrees it is strong confluence

if it disagrees - WALK AWAY!

Divergence is right too often to be ignored

Here is GBPJPY

Up on monthly weekly daily

respecting gap as support on H1 and moving up from
there.

Price is almost certain to move up

but whether it moves down to stop me out is the one
thing we can never know.

[Jerome32]

Nice trade on EURCAD for 72 pips

ascending fractal boxes and trendline
break of descending trendline not shown/

compelling candlestick pattern (Wilde bar)

ascending AO after first retrace

[Jerome32]

EURCHF 6/11 +52 pips

[Jerome32]

I am now focusing strictly on 4h time frame, trading divergence
in direction of missed weekly pivot. no SL but rescue trade to
recoup all losses if trade goes 300 pips in wrong direction

results updated regularly here

and occasionally on this thread
9/11 USDJPY 48 PIPS $4.30
9/11 USDCHF 50 PIPS $5.06
6/11 EURCHF 52 PIPS $5.19
3/11 USDCAD 95 PIPS $7.46
October 2017
28/9 GBPAUD 40.07
29/9 EURGBP 23.40
2/10 EURUSD 46.20
2/10 GBPAUD 110.00
2/10 USDCAD 20.33
4/10 GBPUSD L59.35 150+ PIPS RESCUEABLE
4/10 EURGBP L27.42 150+ PIPS RESCUEABLE
4/10 GBPCHF L29.31 150+ PIPS RESCUEABLE
5/10 USDCAD 32.15
5/10 USDCAD 14.26
16/10 NZDCAD 40 pips $65
16/10 EURJPY 30 pips $50
16/10 CADJPY 20 pips $32
16/10 AUDCHF 31 pips $62
16/10 EURNZD 35 pips $50
16/10 NZDCHF 25 pips $42
23/10 EURCAD 72 pips ​$9.28
23/10 USDCAD 33 PIPS $5.30
26/10 USDCAD 13 PIPS $2.11
26/10 NZDJPY 12 PIPS $2.01
30/10 EURGBP 49 PIPS $13.06
September 2017
​12/9 NZDCAD 40.48
11/9 AUDNZD 35.70
12/9 EURNZD 36.89
14/9 GBPUSD L 30.60
14/9 GBPUSD 52.30 RESCUE TRADE
14/9 USDCAD 44.17
15/9 AUDNZD 32.93
18/9 EURGBP 68.94
20/9 EURNZD 15.40
22/9 GBPCHF 58.18
22/9 CADJPY 49.15
22/9 GBPJPY 53.57
22/9 GBPJPY 4.43
22/9 GBPCAD 38.39
22/9 GBPAUD 41.20
​22/9 EURJPY 43.74
22/9 USDJPY 44.85
25/9 GBPJPY 68.16
25/9 USDCAD 39.55

[Jerome32]

My first loser in a while. NZDUSD -172 pips. I didn’t wait for it
to go the full 300 pips as there was a clear break of weekly support
and the descent now looks very likely to continue.

But looking at the screenshot I think I entered way too late! - the
strategy didn’t fail as price did reverse 157 pips after Divergence -
pretty much where your’s truly decided to enter. 100 pips beyond
even where the true TP should have been for 50 pips.

To put it another way, if I had entered on break of initial trendline
after Bullish Divergence I could have easily made over +100 pips
profit instead of -172 pips loss.

What happened was I was eager to get started and set POs on
all currencies that had divergence, but this one was set 32 bars after
where the true entry should have been - far too delayed, after the
upmove had happened! - I think the idea is to get in before the
move happens!

Lesson learnt.

All my current PO’s now are set to break trendline of fresh
Divergences. I hope this will be a big improvement.

Most important, there are implications for the rescue trade,
because, as in this case, rescue trades always work after first
failure

in this case, even though I lost, it wasn’t a first failure - not at all!

so what do I do now - the strategy doesn’t really make sense
in this situation.

Hopefully, this won’t happen again

[Jerome32]

I’m back, and still persevering with reversals.
I’ve got a new twist now which seems to be working.

TDI - powerful indicator - this is probably the main
signal ie when thick navy crosses outer light blue lines.

next requisite is the yellow star with the black arrow,
borrowed from some free Binary Options system.

Third criteria, and the reason why I’m back, is
confluence with Snorm’s Harmonicindi.

I think the confluence is critically important but
I want to check and compare.

However, the system works well without Snorm
and it does keep me out of a lot of winning trades.

So I want to decide whether to keep it or dispense
with it.

The last indicator is something of a curiosity.
It is also the window component of the BO system.

It is very effective, especially for very short term
trades, hence its popularity for BO use.

but for LT trades it is a bit confusing and you need
to use it in a different way, or perhaps not at all.

There are many subtle nuances to the system
which I’ll explain as I go

First trade is Daily Gold which meets all my
current criteria

Entry Star Arrow symbol on chart
Snorm Harmonic pattern formed
TDI thick navy crossed light blue and
thick red and pointing upwards
STR thin maroon confirmation line above thin
navy line = bullish whereas below thin navy indicates
bearish

[Falstaff]

Now THAT - is a nightmare for a colour-blind lad !

[Jerome32]

A similar set up on eurcad daily but without confluence
of Harmonicindi.