Seeing so many divergences fail in the current market environment (3 years before up till now) or getting heavily violated by big price moves against the divergence's signal I have concluded that in more cases than not, one can make a profit by trading against the divergence while potentialy also taking into account one or two more filters like Volume.
The first premise at the base of this trading style is:
Price will go against the divergence a significant way before respecting it, IF it will respect it at all.
The second premise is:
Many traders fall in the trap of a divergence and sell or buy too early and take weak, rushed decisions based on them. The unpredictable and merciless market will use them as liquidity. And if they wont see it as a divergence, they will think its a top or bottom and again, will fail with their trades.
The third premise is:
In such a chaotic, volatile market environment that is driven less and less by technicals and more by unpredictable events and fundamentals in the current day, a contrarian approach to trading ie. not following the herd to the butchery may provide better results.
This thread is intended to find out just about how successful it is to trade those divergences in a contrarian way with Volume as additional filter. I wil be posting charts soon and also waiting your feedback. For now, this is not a system but mostly a trade idea. If we find out the results are profitable, then we can assemble a system.
The first premise at the base of this trading style is:
Price will go against the divergence a significant way before respecting it, IF it will respect it at all.
The second premise is:
Many traders fall in the trap of a divergence and sell or buy too early and take weak, rushed decisions based on them. The unpredictable and merciless market will use them as liquidity. And if they wont see it as a divergence, they will think its a top or bottom and again, will fail with their trades.
The third premise is:
In such a chaotic, volatile market environment that is driven less and less by technicals and more by unpredictable events and fundamentals in the current day, a contrarian approach to trading ie. not following the herd to the butchery may provide better results.
This thread is intended to find out just about how successful it is to trade those divergences in a contrarian way with Volume as additional filter. I wil be posting charts soon and also waiting your feedback. For now, this is not a system but mostly a trade idea. If we find out the results are profitable, then we can assemble a system.