Hidden divergence

chamane, how long does the trading zone last, or a better question is how do you know the trading zone is over?

Hi ROEye,

What I call the Trading Zone starts when the MACD line crosses the zero line on the intermediate timeframe and ends when it crosses back the zero line.

lol thanks for responding. I just found the answer on page 94 or 95 too.

Do you use an alert of some kind to spot HD, or do you just spot them by eyeing the charts? I guess the more I look for HD, the easier it will be to spot..

Hi Chamane,

In the past, I was using a system with Trix and Renko. I tweaked it a lot. The best signals I got were when Fast Trix has just crossed Zero line and slower Trix at same time (give or take few renko boxes in between), and of course in conjunction with all other criteria (S/R, MTF, etc...).

Now when I recall this, We may use the same thing here. For example when MACD on the intermediate timeframe has just crossed zero or has not peaked/troughed relatively to previous peaks/troughs, then we may have a great signal.

It will be more of the sweet spot between the indi and PA. There is a price for sure which is many potential trades would be avoided. This is exactly what happened to me with my old (trix and renko) system. I found my self-trading very very less but oh boy! , I could capitalize on those signals and go heavy.

Anyway, I thought of throwing this here as a way to filter a bit more and not necessarily to only use this method. So we can use the same MACD indi as stochastics by waiting for MACD to be sloping in our direction and is also not in a relatively Oversold or Overbought zone and preferably if is just crossing or has just crossed or already crossed two -three candles ago.

Although of the lagging nature of MACD, but sometime we may find small Doji candles or small range candles that are giving the chance to align the indi with PA. Alot of patience is needed to see this happening on this kind of setups. I myself never tried MACD as an indicator in such kind of setups.

HD pattern developing on 4HR chart.

It is a good one.

I am thinking we are on Weekly R.
And also A Bearish Div forming on daily.

Thie above points are very subjective as there still might be a bit of breath and some bullishness as you showed in H4 TF.
Tricky for me...
What do you think?

result +180

result

aud usd wait for cross

Sell gbpusd now
127% ext
divergence
stocastic cros

sell eur usd
127% ext
divergence
sto cros

mtharwat,
When I started to look at divergences, my biggest difficulty was to avoid false signals. A divergence can distort quickly during its development, that's why I find the MACD handy to confirm or invalidate price direction. It is an indicator that lags for its signal but it offers stability. Price action can also give disappointing results sometimes. GBPAUD is a good example to look at.



On the Daily chart, we see a clear uptrend, although there is a bearish regular divergence developing. I consider it a heads, up, not more. On the 4HR chart, we had a clear hidden divergence pattern (blue vertical line). Based on that, I was looking for entry signals on the 1 HR chart. I draw two trendlines to show price action. Price crossed the long one, but not the short one. Some would have entered long on the first signal (with a loss), but I prefer to wait for MACD to cross the zero line, which never happened (circle). Instead, price reversed and we saw a hidden divergence pattern on the down side. Switching to the 15 min chart, we could have entered on MACD signals. There were three cross of the zero line, and switching to the 1 min chart on a cost averaging approach, we would have minimized our loss and maximize our profit. There are many situations when we see what seems to be contradictory divergence patterns from one timeframe to the other, but when I decide to pick a HD developing pattern, I follow my rules to the finish.

By the way, you can use other indicators such as Trix and I am sure you can be successful with it.

EURUSD

my day is done.

Played well.

I had two targets. The first one was hit (35 pips). Waiting on the second one (45 pips so far).

Attached a Daily chart.

I was anticipating a decline in JPY from this synthetic chart of Yen pairs. (4H attached)

Hi dany, what are indicators you use? Are you still using ichimoku? Thank you

Yes i use ichimoku and bollinger

I prefer ichimoku to place my order properly

i see... i will check your old posting. Thank you very much

Hidden divergence pattern developing on EURNZD Weekly chart.