different pairs react to differences in different ways. There are pairs that usually do not observe the differences. Thus, these pairs are unsuitable for divergence trading.
For me, MACD. Divergence shows up regularly on any pair/indecis, and if you know how to identify it and combine it with supporting signals such as S&R, fibonacci, trend lines etc, divergence is an incredibly powerful signal, not just for entries, but for exits as well.
Here's one very simple 40 sec tf example from the Dow last week, one of many I could have used as an example.
I like the PZ Divergence indicator the best! It provides multiple options to identify divergence for you to select from: RSI, MACD, CCI, Williams %R, Momentum or Stochastic. Plus, alerts, pushes & email.
As a quick follow up to my post above, there will be many who say that it is easy to post a historical chart as everything becomes apparent after the event, which is true of course, so here is a before and after on the S&P from awhile back posted here on ff.
Once you get a feel for them, MACD diversion can become a lethal weapon in your trading arsenal.
i post loads of live trades and show my fxbook...... i have posted 2 live trades for next week look at my profile and click on my posts Silver and AUD/USD live trades if they set up i will post entry with stops and targets and i will manage the position on here every step
Feel free to follow them live i think im being very honest and upfront im posting live trades in a live market in real time
aud/usd for next week
weekly chart with bearish piercing line candlestick formation at weekly trendlind res
H4 chart there is bearish macd with hidden swing divergence with potentual head and shoulder forming price has broken through the cloud my entry thoughts are on chart. I will update and manage the position live
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