It seems to me that all he’s (the robot) is doing is keeping a large enough stop that eventually price comes back. Indeed, price does rotate. But is that the best way to profit? Surely there must be a better solution, such as getting out and avoiding the drawdown and then re-entering.
I just watched his video on how he created the Finch, that it’s based on momentum divergence. If there was divergence, and yet price doesn’t reverse as is expected - and subsequent to that, the divergence goes away - obviously it was a failed signal. Despite the divergence, just because momentum had slowed, it was a false signal that it was saying that price was getting ready to reverse.
So why would one stay in it? The robot (apparently) does, because price will come back, and it often does since price tends to rotate. But at that point, it’s not due to the divergence. I think Rob has said it’s a delayed reaction (clarify this if I’m wrong), but at that point, his same indicator is showing something else. Perhaps even a divergence in the other direction. Why would one presume that it’s due to a delayed reaction to the prior divergence?
Just my .02.
