Pairs: So far: EUR/USD, GBP/USD, EUR/AUD, USD/CAD, AUD/USD, USD/JPY (test others if you want)
Tools: RSI ( period: 6, aplied to close),
I'm going to show a simple divergence setup that should reduce confusion when trading divergence. The thing in trading divergence is that sometimes oscilator shows divergence so you wait for your (lets say) breakout candle to make an order, but then makes another high or low (while not hitting you hipothetical SL) and the price and oscilator are in line now and you don't know if you should trade that previous peak divergence or just cancel whole divergence set up.
Like this (or anything that makes you confused):
THE SETUP:
So what I'm finding most reliable is when the peaks of oscilator and price are very close to each other, there are no half-lows, half-highs beetwen them and divergence has occured.
Like this:
So this looks like a kind of a mountain 2000+ m, because there are two highs (silly writing)
RULES:
RSI 6, CLOSE
1. Set up your line chart.
2. Find a divergence mountain setup which is:
"The peaks of oscilator and price are very close to each other, there are no half-lows, half-highs beetwen them and divergence has occured".
"The left wall of a OSCILATOR's mountain has to be steep, and straight" (imagine mountain builded from matches of diffirent length)
3. Set up your candlesticks chart.
4. Taking a position.
4.1. Place your pending order on a breakout of last candle. (Unless it's a doji or pin bar, then place your stop orders 2 pips above/ below close.
4.2. SL above/below current swing high/low
4.3. TP will be x2 or more.
Note: I'm not a native english speaker so if something is not clear please ask.
Tools: RSI ( period: 6, aplied to close),
I'm going to show a simple divergence setup that should reduce confusion when trading divergence. The thing in trading divergence is that sometimes oscilator shows divergence so you wait for your (lets say) breakout candle to make an order, but then makes another high or low (while not hitting you hipothetical SL) and the price and oscilator are in line now and you don't know if you should trade that previous peak divergence or just cancel whole divergence set up.
Like this (or anything that makes you confused):
Attached Image
THE SETUP:
So what I'm finding most reliable is when the peaks of oscilator and price are very close to each other, there are no half-lows, half-highs beetwen them and divergence has occured.
Like this:
Attached Image
So this looks like a kind of a mountain 2000+ m, because there are two highs (silly writing)
RULES:
RSI 6, CLOSE
1. Set up your line chart.
2. Find a divergence mountain setup which is:
"The peaks of oscilator and price are very close to each other, there are no half-lows, half-highs beetwen them and divergence has occured".
"The left wall of a OSCILATOR's mountain has to be steep, and straight" (imagine mountain builded from matches of diffirent length)
3. Set up your candlesticks chart.
4. Taking a position.
4.1. Place your pending order on a breakout of last candle. (Unless it's a doji or pin bar, then place your stop orders 2 pips above/ below close.
4.2. SL above/below current swing high/low
4.3. TP will be x2 or more.
Note: I'm not a native english speaker so if something is not clear please ask.