Overview:
The ARC_Div Algo is an automated trading solution for Ninjatrader which trades Divergence setups. Most of the time, price and momentum move together. Divergence analysis identifies when price and momentum are moving in opposite directions and this is a powerful tool for detecting when a reversal move is imminent. The reason is that when Divergence is detected, we know that by definition it is quite temporary and the price action required to eliminate the Divergence conditions often results in a powerful move, which presents excellent profit potential. The software is capable of detecting both Regular and Hidden Divergence setups. In addition, the software includes an option to trade Potential Divergence before it is actually confirmed as a way to capture a greater portion of the move. The speed at which these setups occur make it difficult to trade manually. By automating the trade entries, you can avoid missing out on potential profits. Once a trade is entered the software automatically manages the position according to your personalized trade plan. The end result is the Div Algo which can enhance the performance of anyone interested in daytrading Divergence setups.
Purpose:
Traders need the ARC_Div Algo software because trading Divergence for quick scalps depends heavily on speed of execution. Even the best manual traders take a certain reaction time to recognize the pattern and enter the trade. This is especially true for Hidden Divergence which is difficult to recognize visually. An automated system can react virtually instantly, avoiding any delays that result in reduced profits. The other advantage is that you know the software will implement your trade plan exactly as configured, giving you the confidence of knowing you won’t be committing manual errors and can rely on the system to implement your strategy as designed.
Elements:
- Autotrade Divergence setups for quick profits
- Exploit both Regular and Hidden Divergence conditions
- Take advantage of Potential Divergence before it is confirmed
- Trade both continuation and reversal setups within a comprehensive Divergence scanning system
- Customize Stop size based on price action
- Utilize optimization functionality to get the best signals
- Apply fully automated trade plans with stop placement and up to 3 targets
- Utilize R-multiple target placement
- Improve trade quality by using comprehensive trend, momentum, and market structure directional filters
- Automate AutoTrail and Breakeven strategies
- Utilize dynamic trade sizing to control Dollar Risk per trade
- Leverage Time filters, Day of Week filters, Holiday filters to focus on the best times to trade
- Apply money management functionality to protect trading capital
- Monitor autotrading in realtime with built in trade signal graphics, execution markers, stop/target graphics, realtime P&L
- Take full advantage of built In Backtesting and Optimization capability to get the best settings for each market
Functions:
The ARC_Div Algo is best used by focusing on instruments which display significant price movement. It is best to trade Divergence using relatively small timeframes for scalp trades because higher timeframes take longer for the Divergence setup to be confirmed so you wind up missing part of the move. Not only do smaller timeframes avoid this issue but also smaller timeframes will generally lead to more trade opportunities. The software can trade continuously (fully automated) or it can be configured to be used semi-discretionarily by arming the algo only in the right conditions. The best thing to do is to fully understand Hidden versus Regular Divergence and then choose which one to focus on in your strategy development. You can use the built in optimization capability to get a preliminary strategy configuration. Next forward test your strategy in live simulation mode. Once you are comfortable with the performance, you can start auto trading a live money account at your own discretion. When market conditions change, it is easy to use the flexibility of the software to adjust to changes in market conditions.
Problem Solved:
- Stops traders from missing out on Regular Divergence trades
- Stops traders from missing out on difficult to identify Hidden Divergence setups
- Stops traders from getting in too late when an explosive move occurs
- Stops traders from trading without a well defined trade plan
- Stops traders from sabotaging their trading due to indecision and fear
- Stops traders from failing to account for price action when placing their stops
- Stops traders from failing to adjust to market conditions
- Stops traders from failing to manage risk appropriately
- Stops traders from trading against momentum, market structure, and directional bias
- Stops traders from failing to identify the best days and times to trade
- Stops traders from not being able to objectively compare the performance of different strategies
- Stops traders from not allowing the data to guide their strategy development