Discussing the article: "Defining your Edge (Part 2): Using Divergence Mapping and a Temporal Fusion Transformer in a Trading Robot"
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Check out the new article: Defining your Edge (Part 2): Using Divergence Mapping and a Temporal Fusion Transformer in a Trading Robot.
In this article we make the case for merging Divergence Mapping with a Temporal Fusion Proxy in a Trading Robot. Rather than depending on lagging price confirmations, the Divergence Mapping's thesis is that acting like a structural sensor can help identify hidden momentum shifts from price action and indicator anomalies. To establish how these anomalies are interpreted over time we use a Temporal Fusion Transformer proxy. This network incorporates historical context to weigh developing trends such that merging it with Divergence Mapping should set us up to spot shifts in accumulation and distribution before price breakouts.
A central and common challenge in technical analysis does not stem from spotting trends, but in surviving the transitional spaces between them. How can false breakouts be avoided? To navigate these, we argue here that one needs to look beneath the surface and focus on the subtle and concealed changes in velocity before structural changes unfold. By pairing Divergence Mapping with a Temporal Fusion Transformer attention layer, we aim to create a solid alternative forecasting metric.
This particular combo of slope calculus and non-linear sequential weighting may not be widely in use. Careful testing and parameter tuning is bound to be a prerequisite for many tradable assets on offer. This article only acts as a foundational step in better understanding and merging these two engines when developing trade entry signals. Our final output is a Trade Robot. In my opinion (not an official MetaQuotes statement), that Expert Advisors with their induction in MQL5, about '09 were meant to be strict positional traders, and not capable of executing concurrent buy and sell orders.
Author: Stephen Njuki