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Hidden divergence

  • #2,201
  • Aug 4, 2019 4:10pm Aug 4, 2019 4:10pm
Some instruments to watch at the start of this week:
EURNZD Daily
EURUSD 4HR
  • #2,202
  • Aug 5, 2019 2:17am Aug 5, 2019 2:17am
Quoting chamane
{quote} Hi, My entries on the 2HR chart are when MACD crosses the zero line. For instance, there were two entries on EURAUD, the first one (first circle) ended up with a small loss but the second one is showing a gain. In the trading zone, more often than not there should be an overall profit. The trading zone for me starts when MACD crosses the zero line on the intermediate chart and ends when it crosses back in the other direction. {image}
Hello Chamane,

In reference to your tf's for refined entry/exit's
For Daily HD's we use the 4HR chart to monitor when madc lines are crossing -+ zero barrier before entry, what smaller TF (if any) do you utilize to exit/enter/ refine your entry as you described your approach above? (D1: HD, 4HR: Entry Signal, TF__ Refine entry/exit based on macd line cross below zero)

Same question applied to your TF preference when trading 4HR HD's with 1HR MACD Line cross, 15 Min for exit/ re-entry?

Appreciate the help,
Cheers.
FF
  • #2,203
  • Aug 5, 2019 5:02am Aug 5, 2019 5:02am
Quoting forexferrari
{quote} Hello Chamane, In reference to your tf's for refined entry/exit's For Daily HD's we use the 4HR chart to monitor when madc lines are crossing -+ zero barrier before entry, what smaller TF (if any) do you utilize to exit/enter/ refine your entry as you described your approach above? (D1: HD, 4HR: Entry Signal, TF__ Refine entry/exit based on macd line cross below zero) Same question applied to your TF preference when trading 4HR HD's with 1HR MACD Line cross, 15 Min for exit/ re-entry? Appreciate the help, Cheers. FF
Hi,
You can find an explanation of a situation describing the method I use in this post. Here is a guideline for chart use:

Attached Image


Of course you can enter trades on each TF category, but drilling down allows to lower the risk and the cost averaging approach increases the chance of success imo.
  • #2,204
  • Aug 5, 2019 12:32pm Aug 5, 2019 12:32pm
Here are some examples of hidden divergence patterns (vertical lines) that didn't materialize. We must not rush trade entries, opportunities will be numerous enough.
Attached Image (click to enlarge)
Click to Enlarge Name: gscreenshot_2019-08-05-060537.png Size: 38 KB
  • #2,205
  • Aug 5, 2019 1:17pm Aug 5, 2019 1:17pm
Hidden divergence pattern on the Daily chart (lime vertical line), start of a trading zone on the 4 HR (red vertical line) and awaiting entry signal on the 30 min (blue rectangle and yellow circle).
Attached Image (click to enlarge)
Click to Enlarge Name: Silver.png Size: 37 KB


Same for SilverEuro.
Attached Image (click to enlarge)
Click to Enlarge Name: gscreenshot_2019-08-05-142317.png Size: 39 KB
  • #2,206
  • Aug 6, 2019 2:04am Aug 6, 2019 2:04am
Quoting chamane
Here are some examples of hidden divergence patterns (vertical lines) that didn't materialize. We must not rush trade entries, opportunities will be numerous enough. {image}
This is my personal problem: rushing to enter trades
  • #2,207
  • Aug 6, 2019 2:12am Aug 6, 2019 2:12am
Quoting chamane
Hidden divergence pattern on the Daily chart (lime vertical line), start of a trading zone on the 4 HR (red vertical line) and awaiting entry signal on the 30 min (blue rectangle and yellow circle). {image} Same for SilverEuro. {image}
By the way, chamane, how do you determine "Trading zone", "awaiting entry signal timeframe"?
  • #2,208
  • Aug 6, 2019 5:40am Aug 6, 2019 5:40am
Quoting vitall
{quote} By the way, chamane, how do you determine "Trading zone", "awaiting entry signal timeframe"?
The trading zone I use starts when MACD crosses the zero line on the intermediate chart and ends when it crosses it back.
  • #2,209
  • Aug 7, 2019 12:05am Aug 7, 2019 12:05am
AUDUSD. +40 pips in the trading zone.
Attached Image (click to enlarge)
Click to Enlarge Name: AUDUSD.png Size: 52 KB


CADJPY. +35 pips in the trading zone.
Attached Image (click to enlarge)
Click to Enlarge Name: CADJPY.png Size: 50 KB


NZDJPY. +101 pips in the trading zone.
Attached Image (click to enlarge)
Click to Enlarge Name: NZDJPY.png Size: 50 KB


NZDUSD. +72 pips in the trading zone.
Attached Image (click to enlarge)
Click to Enlarge Name: NZDUSD.png Size: 52 KB
  • #2,210
  • Aug 7, 2019 1:21am Aug 7, 2019 1:21am
Quoting chamane
AUDUSD. +40 pips in the trading zone. {image} CADJPY. +35 pips in the trading zone. {image} NZDJPY. +101 pips in the trading zone. {image} NZDUSD. +72 pips in the trading zone. {image}
TOP SHELF Stuff.. So clear
  • #2,211
  • Aug 7, 2019 7:44am Aug 7, 2019 7:44am
Indecision at a resistance level.
Attached Image
  • #2,212
  • Aug 9, 2019 12:01pm Aug 9, 2019 12:01pm
AUDJPY 4HR TF.
Attached Image (click to enlarge)
Click to Enlarge Name: AUDJPY.png Size: 38 KB
  • #2,213
  • Aug 9, 2019 2:32pm Aug 9, 2019 2:32pm
Hidden divergence patterns on 4 HR timeframes.
Attached Image (click to enlarge)
Click to Enlarge Name: gscreenshot_2019-08-05-142317.png Size: 32 KB
  • #2,214
  • Edited 4:31am Aug 13, 2019 4:17am | Edited 4:31am
A question for thoes who have traded this for some time.
Has it happened that you spotted a HD on the daily or H4 and waited for a divergence on a smaller timefrime to enter, but it never came, while price kept moving in the direction of the HD ?
If so, is it a rare or frequent occurance?
And is it ok to chase the price or wait for a confirming divergence on a smaller timeframe?
  • #2,215
  • Aug 13, 2019 7:47am Aug 13, 2019 7:47am
Quoting Verde
A question for thoes who have traded this for some time. Has it happened that you spotted a HD on the daily or H4 and waited for a divergence on a smaller timefrime to enter, but it never came, while price kept moving in the direction of the HD ? If so, is it a rare or frequent occurance? And is it ok to chase the price or wait for a confirming divergence on a smaller timeframe?
From my experience, it happens often. Having a regular divergence on a smaller TF in the direction of the HD is a strong tool to consider, but it is not the only one. Here are the tools I am using in a smaller timeframe:

  1. The cross of a trendline.
  2. MACD crossing the zero line.
  3. Regular divergence in the direction of the higher TF HD.
  4. Entries in the trading zone in a cost averaging approach.

The more of those criteria met, the better.

  • #2,216
  • Edited 10:05am Aug 13, 2019 9:51am | Edited 10:05am
Quoting chamane
{quote} From my experience, it happens often. Having a regular divergence on a smaller TF in the direction of the HD is a strong tool to consider, but it is not the only one. Here are the tools I am using in a smaller timeframe: The cross of a trendline. MACD crossing the zero line. Regular divergence in the direction of the higher TF HD. Entries in the trading zone in a cost averaging approach. The more of those criteria met, the better.
Thanks for the reply, chamane.
So no point in chasing it, wait for the next one?

You said that the MacD crossing the zero line is an entry, but on which timeframe?
A theoritical setup...... I found a daily HD. On the H4, H2, H1 and M30 there is no divergence, either regular or HD, so what would you do? Which timeframe zero cross is to be taken?
On a daily HD, is a zero cross of a M30, too low a timeframe?
Is this a zero cross of the histogram or the macd moving average line?
  • #2,217
  • Aug 13, 2019 10:15am Aug 13, 2019 10:15am
Got a little help from the news on this one.
Attached Image (click to enlarge)
Click to Enlarge Name: Divergence.png Size: 29 KB
  • #2,218
  • Aug 13, 2019 10:39am Aug 13, 2019 10:39am
Quoting chamane
Got a little help from the news on this one. {image}
Can we still enter trade
"The market doesn't care about you, stop hoping it will." Dirk
  • #2,219
  • Aug 13, 2019 10:45am Aug 13, 2019 10:45am
Quoting Flashyberry
{quote} Can we still enter trade
Personally, I would not enter trades after such a big move.
  • #2,220
  • Aug 13, 2019 1:28pm Aug 13, 2019 1:28pm
Quoting Verde
{quote} Thanks for the reply, chamane. So no point in chasing it, wait for the next one? You said that the MacD crossing the zero line is an entry, but on which timeframe? A theoritical setup...... I found a daily HD. On the H4, H2, H1 and M30 there is no divergence, either regular or HD, so what would you do? Which timeframe zero cross is to be taken? On a daily HD, is a zero cross of a M30, too low a timeframe? Is this a zero cross of the histogram or the macd moving average line?
Verde,
You can trade directly on the timeframe where you spot the hidden divergence pattern. Then you can use major Fib levels, cross of a trendline or price action to enter the trade.

If you choose a smaller timeframe for your entry after spotting a HD pattern, I suggest the very next smaller TF. Weekly-Daily, Daily-4HR, 4HR-1HR, 1HR-15min are combos I usually use. Then again you can use a cross of a trendline, price action or the one I prefer, the MACD cross of zero line.
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