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Here's a divergence spotter and stop placement idea I'm hoping some skilled programmer might want to create as an addition to the GomCD or similar indicator...
See the attached showing a box which is what I call the "Divergence Spotter and Stop Box". I literally have been dragging this thing around my GomCD indicator as a guide when ever I see a pivot point plotted (i.e. PAS indicator). As shown below I compare the two and enter/stop as per instructions below...
I give all the credit to Christopher at Fulcrum Trading who uses this same strategy when entering double bottom double top trades. The key is to adjust the height as per a given instruments specific behavior in divergence conditions. For example, if price turns against you you're only risking a given amount of ticks before price retraces back to the pivot point. Yet, a seasoned trader who has done enough back testing knows price typically won't go as far regarding familiar amounts of divergence and will find and keep this threshold "sweetspot" accordingly.
Can you help answer these questions from other members on NexusFi?
Correction... In the intruction below I said "enter short when price closes below box". It's not price but when the Accumulated Delta bar closes below the box.
you could ask dadof3and3 if he has interest in putting GomCD to his D3spotter suite. He created an indicator which can spot divergences referencing to standard indicators such as RSI, CCI etc.
