SMT Divergence


matty44

Well-Known Member
So you're trying to say that its a completely useless "indicator" like RSI or something?

I've used it over the last few years, and I can definitely say its helpful. Haven't you been following ICT's teaching too? If he says he uses it for every trade he takes, don't you think it might be just a little bit useful perhaps? I've used it like a filter to cherry pick trades, and no, I don't have a record of exactly what % of trades with SMT worked out, but I've seen its usefulness in REAL TIME. Obviously there are other factors that contribute to why I take trades, and wouldn't just base it off divergence alone. But the fact that you could maybe place a trade without SMT considerations doesn't mean that its not a valid tool.

Matty
 

outthislife

Well-Known Member
matty44 said:
So you're trying to say that its a completely useless "indicator" like RSI or something?

I've used it over the last few years, and I can definitely say its helpful. Haven't you been following ICT's teaching too? If he says he uses it for every trade he takes, don't you think it might be just a little bit useful perhaps? I've used it like a filter to cherry pick trades, and no, I don't have a record of exactly what % of trades with SMT worked out, but I've seen its usefulness in REAL TIME. Obviously there are other factors that contribute to why I take trades, and wouldn't just base it off divergence alone. But the fact that you could maybe place a trade without SMT considerations doesn't mean that its not a valid tool.

Matty
To be clear, you're comparing X/USD to the DXY right?

Think you could show a quick snapshot of how you have used it in the past?
 

walshman

ICT has shown me PATIENCE is the KEY!
Did anybody copy the chat from the SMT live session? The chat in the video is blurry and hard to read. :eek:
 

matty44

Well-Known Member
outthislife said:
To be clear, you're comparing X/USD to the DXY right?

Think you could show a quick snapshot of how you have used it in the past?
Yes, that, and comparing GBP/USD to EUR/USD. I posted my trade today on the previous page with picture of both kinds of SMT divergences.

Matty
 

the golden gun

RINSE & REPEAT
outthislife said:
Think you could show a quick snapshot of how you have used it in the past?
yeah that would be a fun game, let's see if the stochs can predict all the same moves that "SMT divergence" can... or not!

>:D
 

outthislife

Well-Known Member
matty44 said:
Like I asked a bit ago, do you follow ICTs work and trust his concepts work?
Yes. But what does that have to do with wanting to see how applicable this very specific technique is?

I'm sure there's something I'm missing, thus the thread.
 

matty44

Well-Known Member
I was directing that comment at golden gun, but my point was that Michael (and his 20 years of experience, and multi-million dollar forex profits) say that its a very useful tool, one that he employs in pretty much all of his trades. So its odd to me that someone who is trying to trade based off his techniques would say that its pretty much useless, when Michael says the opposite.

What exactly do you feel its missing? Maybe I don't understand what your issue with it is...

Also, did you see the trade I posted today? Was that not an applicable use of SMT?

Matty
 

the golden gun

RINSE & REPEAT
One of the factors that contributes to my lack of faith is an experiment I did a few years ago. I found 3 brokers offering a feed for USDX and compared the highs and lows. To my dismay, I found that SMT divergence that had occurred on one broker, simply did not appear on another!

So exactly how much do you trust that USDX broker feed that you're using? ;)
 

rod178

Well-Known Member
I prefer to use correlated pair divergence, I've always found that USDX to be rather artificial. Maybe US Bond prices, say 5yr, would be a better tool than the USDX.
 

sqa

Village Scribe
ICT probably has a USD Futures feed. Our resident Jonnycab has used that for quite a while.

Note: one time ICT mentioned that his actual computer setup had 12 Monitors. He pays for the best feeds (and the best software he likes to use), so there can be some problems with other feeds. At the same time, if the tool doesn't work for you, it doesn't work for you. Not everything does.

Note 2: ICT still uses GMT Pivots and the Trader's Trinty tool, he just doesn't talk about these days. ICT actually uses his entire Toolbox, at least on the HTF Swing Trades. Intra-day is Intra-day price action. (And why he normally doesn't hold those Intra-day setups very long)

Note 3: I see why ICT doesn't like the Yen these past few weeks. "Somebody" keeps buying a lot of USD during the NYO period. *cough*Bank of Japan*cough*. Wow, it's dusty in here.
 

the golden gun

RINSE & REPEAT
sqa said:
ICT probably has a USD Futures feed. Our resident Jonnycab has used that for quite a while.

Note: one time ICT mentioned that his actual computer setup had 12 Monitors. He pays for the best feeds (and the best software he likes to use), so there can be some problems with other feeds. At the same time, if the tool doesn't work for you, it doesn't work for you. Not everything does.
You're right, I don't think anyone should use USDX SMT divergence without having the actual USDX futures feed. But ICT doesn't say that now does he... he seems to be saying that you can get away with just using the free demo USDX feed. But hey... it's your money, you can have faith in whatever you want lol

sqa, have you considered trading EUR/JPY? you could still get moves that are on your schedule (i think?) and not have to worry about pesky USD transactions by the BOJ :thumbsup:
 

sqa

Village Scribe
I'll eventually get to EJ, as that's actually the key setup pair, by volume, during the Asian Range. But, right now, I've just upped my account size (yen) and moved Cable to real money, plus started EG. That's good for the next 2 months.

EJ is actually the transaction medium for a lot of Korean Won, most of SE Asia and even some Yuan. I think it's a liquidity issue more than anything else. One of those points I came across with reading. EJ is like 30% of all currency volume during AR.
 

matty44

Well-Known Member
The screen shot is not from the broker I actually use to take trades...just threw that on the image to illustrate where I actually took the buy.

Matty
 

outthislife

Well-Known Member
matty44 said:
Hmm.. Interesting. The USDX is going to be an inverted correlation w/ fiber and cable, though, so no matter what - it's just like reading the chart as it is. It's not like it's pulling price with it at a later date, every change in the USDX affects the rest.

Did you catch the surge today utilizing SMT divergence? What about all the other peaks that "diverge" in your screenshot? Signal vs noise ratio.

the golden gun said:
oh, excellent trade then. catch some triple digit pips?

I noticed a new crack forming...
Isn't that just the correlation at work?
 

the golden gun

RINSE & REPEAT
outthislife said:
Hmm.. Interesting. The USDX is going to be an inverted correlation w/ fiber and cable, though, so no matter what - it's just like reading the chart as it is. It's not like it's pulling price with it at a later date, every change in the USDX affects the rest.

Did you catch the surge today utilizing SMT divergence? What about all the other peaks that "diverge" in your screenshot? Signal vs noise ratio.

Isn't that just the correlation at work?
it's a divergence... fiber shouldn't be breaking highs if USDX isn't breaking lows
 

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