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Hidden divergence

  • #1,981
  • May 20, 2019 10:04am May 20, 2019 10:04am
Quoting chamane
Here is an example of managing hidden divergence with a drill down approach which I think is ideal for high timeframes that have a high level of risk. The HD pattern is identified on the Monthly chart (yellow trend lines). Switching to the Weekly chart, we wait for a trading zone (blue rectangle) to start (red vertical line). An entry given by MACD crossing the zero line to the down side is possible at that point, but still, the risk might be too high. {image} Switching to the 4 HR chart, we wait for every signal that MACD is giving us crossing...
Thanks for explaining with another example!
  • #1,982
  • May 20, 2019 10:11am May 20, 2019 10:11am
DOW
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  • #1,983
  • May 20, 2019 11:06am May 20, 2019 11:06am
Quoting dany78
DOW {image}
Too bad I do not have access to that instrument.
  • #1,984
  • May 20, 2019 11:07am May 20, 2019 11:07am
Another HD opportunity on the 4 HR chart. GBP seems to keep going down.
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  • #1,985
  • May 20, 2019 4:24pm May 20, 2019 4:24pm
AUD/JPY, developing

4H
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1H
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  • #1,986
  • May 21, 2019 12:30am May 21, 2019 12:30am
Beautiful one

Didn't see that coming even though I watched closely. @Wonderful
"The market doesn't care about you, stop hoping it will." Dirk
  • #1,987
  • May 21, 2019 5:25am May 21, 2019 5:25am
Quoting Wonderfull
AUD/JPY, developing 4H {image} 1H {image}
Good day pal, may I have the indicator on the left corner of your chart please.
  • #1,988
  • May 21, 2019 6:53am May 21, 2019 6:53am
GBPUSD 4 HR +30 pips.
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  • #1,989
  • May 21, 2019 8:47am May 21, 2019 8:47am
Quoting chamane
GBPUSD 4 HR +30 pips. {image}


Few queries:
a) Do you expect price to be below/above Moving Average (e.g. 10, 20 & 50 EMAs) for a sell/buy and are aligned in same direction, as additional confluence?
b) When price broke a trendline in a timeframe & forms HD with some sideways movement subsequently, would you consider taking up the trade? For e.g. refer attached AUDCAD H1 chart. Although this pair in H4 looks good but in H1 seems like a trend change with broken trend line and also Mvg Avgs are not aligned in H1.
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  • #1,990
  • May 21, 2019 12:23pm May 21, 2019 12:23pm
Quoting rmchokku
{quote} Few queries: a) Do you expect price to be below/above Moving Average (e.g. 10, 20 & 50 EMAs) for a sell/buy and are aligned in same direction, as additional confluence? b) When price broke a trendline in a timeframe & forms HD with some sideways movement subsequently, would you consider taking up the trade? For e.g. refer attached AUDCAD H1 chart. Although this pair in H4 looks good but in H1 seems like a trend change with broken trend line and also Mvg Avgs are not aligned in H1. {image}
rmchokku,

a) I do not use EMAs directly. I use 2 Donchian middle lines as an indication of price behavior in a higher timeframe. You can see them in my previous posts. My use of MACD crossing the zero line in a lower timeframe is similar to the crossing of two EMAs. So I use EMAs, but indirectly.
b) In that specific case, I would not enter after the sideways movements because it is not a typical pattern to me. I prefer clear pattern and I try to avoid entering a trade at all cost. But you could have entered at the cross of the zero line by MACD because it is a strong signal. You could have then managed the trade on the 5 minutes TF with a cost averaging approach. It is a useful convergence tool that gives confidence for a successful result.
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  • #1,991
  • May 22, 2019 4:38am May 22, 2019 4:38am
Clear one.. normally I'd run after two or three candle stick.
"The market doesn't care about you, stop hoping it will." Dirk
  • #1,992
  • May 23, 2019 5:19pm May 23, 2019 5:19pm
Here is a HD pattern on the Daily chart. If MACD crosses the zero line on the down side, it is an entry signal for me.
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  • #1,993
  • May 23, 2019 5:29pm May 23, 2019 5:29pm
I missed the entry on this one. I will monitor the pair with a cost averaging approach and watch for entries in the trading zone (blue rectangle) on the 30 minutes chart.
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  • #1,994
  • May 23, 2019 7:01pm May 23, 2019 7:01pm
Quoting chamane
Here is a HD pattern on the Daily chart. If MACD crosses the zero line on the down side, it is an entry signal for me. {image}
Yeh I see it too but it's yet to form on entry. Have you place trade sir?
"The market doesn't care about you, stop hoping it will." Dirk
  • #1,995
  • May 23, 2019 7:57pm May 23, 2019 7:57pm
Quoting Flashyberry
{quote} Yeh I see it too but it's yet to form on entry. Have you place trade sir?
No, not yet.
  • #1,996
  • Edited 8:27pm May 23, 2019 8:14pm | Edited 8:27pm
I just entered .. is that safe.. it was on profit prior before now but went back up

It just jumped up to like massive profit out of the blue.. after I almost lost my faith.. what do you think sir? How many pips aim do you think it's gonna get before we exit trade.
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"The market doesn't care about you, stop hoping it will." Dirk
  • #1,997
  • May 23, 2019 8:29pm May 23, 2019 8:29pm
Quoting Flashyberry
I just entered .. is that safe.. it was on profit prior before now but went back up It just jumped up to like massive profit out of the blue.. after I almost lost my faith.. what do you think sir? How many pips aim do you think it's gonna get before we exit trade. {image}
If you are talking about AUDUSD Daily HD pattern, I am still waiting for entry signals on 4 HR chart.
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  • #1,998
  • Edited 9:42pm May 23, 2019 9:20pm | Edited 9:42pm
Quoting chamane
{quote} If you are talking about AUDUSD Daily HD pattern, I am still waiting for entry signals on 4 HR chart. {image}
Ok although I'm already up few bucks... Thanks
"The market doesn't care about you, stop hoping it will." Dirk
  • #1,999
  • May 24, 2019 12:09am May 24, 2019 12:09am
DAX has got bearish HD in Weekly & Daily is in trade zone. Though MACD is below zero in H4 but momentum seems to be fading. I think we can take the next MACD cross over down below to zero in H4/H2. Your thoughts are welcome on the analysis of making entry in H4/H2.
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  • #2,000
  • Edited 8:50am May 24, 2019 5:42am | Edited 8:50am
Quoting rmchokku
DAX has got bearish HD in Weekly & Daily is in trade zone. Though MACD is below zero in H4 but momentum seems to be fading. I think we can take the next MACD cross over down below to zero in H4/H2. Your thoughts are welcome on the analysis of making entry in H4/H2. {image} {image} {image}
A HD pattern is formed on the Weekly with the MACD main line. On the Daily, we can see that price made a burst down and reversed up shortly after (yellow circle). That created a very short trading zone (blue rectangle) on the 2 HR chart where no entry signal is available. The HD pattern is still valid on the Weekly, so let's wait and see what happens.
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