DislikedBen..I didnt want to say anything when you posted this trade cause i knew this would happen..
Its done to me before as well so dont worry about it.. When this pair moves like it has been.. I stand aside.. dont get in the way..on moves like this I prefer a solid pa on the daily to stop the move or at least pause it..
I know 90 is a nice round number but have a look just above at 91-91.50. on the weekly.
Ignored
By the way, it makes me think. Divergence used on trend reversals is quite reductions. It comperes the speed of past moves to the speed of the recent move. But it's only a ratio. In this case there was divergence because the past move was FASTER. But it doesn't measures the speed itself. I mean, look at the chart, what a sharp move. Because it was a bit sharper in the past it means that there is a bearish sign? IMO NO!
Now let say the oscillator makes matching highs, and price makes an higher high. That actually tells me that the speed of the move is the same. Of cause that price made an higher high - the trend is up - but the speed is still the same.
So I can't see how there is any kind of bearish sign when MACD makes matching highs and price higher high. The people that say that, actually say that the speed of the move needs to get faster in order that there will be no divergence (bearish sign). LOL!!! where is the sense here? What is the connection between the direction of the move price is making, and the speed, and the momentum?
Sorry if my explanation was bad, please let me know if it was clear.
I am starting to think that any king of "indicator" is a complete BS.
I can still understand the idea of double tops|bottoms with div. That was explained well by Joel - if the speed was fast in the fast and didn't break a certain spot, most likely a slower speed won't break THE SAME SPOT.
But I honestly can't see any sense in using divergence on trends. Please think about it for a moment. Does price needs to keep going faster forever in order to not get a reversal signal? Can't the speed stay the same while price moves to one direction?
By the way, quite funny...after that post, a BUOB formed off the round number (not a great one). I remember Jim post about playing a break of tow matching highs|lows during a very sharp trend can be a good continuation trade. So I bought the break (on my other demo account|testing account) and I'm already up to almost 2R.
Ben