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Hidden divergence

  • #2,961
  • Jan 11, 2020 12:22pm Jan 11, 2020 12:22pm
Another HD pattern developing on the Daily USDCAD chart. Potential entry on the 4 HR TF.
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  • #2,962
  • Jan 11, 2020 12:28pm Jan 11, 2020 12:28pm
Another opportunity for entries on the 4 HR chart during a HD pattern under development on the Daily TF. It surely will be a busy week watching all those opportunities on Daily charts.
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  • #2,963
  • Jan 11, 2020 1:23pm Jan 11, 2020 1:23pm

  1. HD pattern on the Weekly TF.
  2. Start of a Trading Zone on the Daily TF.
  3. Waiting for entries on the 1 HR chart in the Zone.

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  • #2,964
  • Jan 11, 2020 1:46pm Jan 11, 2020 1:46pm
Hi, chamane! Check this out:
https://www.forexfactory.com/showthr...9#post12599279
  • #2,965
  • Jan 11, 2020 2:33pm Jan 11, 2020 2:33pm
Quoting vitall
Hi, chamane! Check this out: https://www.forexfactory.com/showthr...9#post12599279
Actualy, I checked that EA: it does not work properly.
  • #2,966
  • Jan 12, 2020 3:33am Jan 12, 2020 3:33am
audnzd , weekly hd, bullish pinbar, daily regular divergence, there's a hd on 4h so most probably it will come a pullback, i think the best buy area will be 50-61,8 retracement on the last 4h bullish impulse, with the osma close to zero level or even slightly negative.
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  • #2,967
  • Jan 12, 2020 8:42am Jan 12, 2020 8:42am
Quoting rrr2010
audnzd , weekly hd, bullish pinbar, daily regular divergence, there's a hd on 4h so most probably it will come a pullback, i think the best buy area will be 50-61,8 retracement on the last 4h bullish impulse, with the osma close to zero level or even slightly negative. {image} {image} {image}
rrr2010,

I agree with your analysis. I also like to drill down to lower timeframes:

  1. HD pattern developing on the Weekly chart (red vertical line).
  2. Regular Divergence pattern on the Daily chart (blue vertical line).
  3. Entry signal on the 4 HR chart (pink vertical line). Since an entry would require some 75 pips of risk using the last swing low as a stop loss, I prefer considering the signal as the start of a Trading Zone (aqua rectangle).
  4. No entry signal so far in the Zone on the 30 min chart, but there was one on the 15 min TF. Up around +15 pips so far.

This approach is systematic and doesn't need to think too much. But there are many other ways to trade hidden divergence.

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  • #2,968
  • Jan 12, 2020 9:09am Jan 12, 2020 9:09am
Quoting chamane
Here an entry could have been made after price crossed the trendline. I prefer to wait for a MACD signal. I'll see after the opening tomorrow and maybe place a pending buy order a few pips past the resistance line. {image}
AUD/USD (HD D1/H4)
What about referring to trading zone on 30 Minute TF as it shows that we have not missed any entry in the zone yet ...
If you don't build your DREAM, Someone will hire to help build theirs ...
  • #2,969
  • Jan 12, 2020 10:09am Jan 12, 2020 10:09am
Quoting drsa1970
{quote} AUD/USD (HD D1/H4) What about referring to trading zone on 30 Minute TF as it shows that we have not missed any entry in the zone yet ...
Yes. You can either enter based on the 4 HR TF signal or wait for entries on the 30 min TF since the last 4 HR candle started a Trading Zone. I prefer trading in the Zone when I can.
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  • #2,970
  • Jan 13, 2020 5:26am Jan 13, 2020 5:26am
EURUSD

If it breaks the downward TL on H4 and stays above the daily upward TL (negating the breakout), then it may be a strong bullish signal.
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  • #2,971
  • Jan 13, 2020 2:08pm Jan 13, 2020 2:08pm
I sold USDCAD:
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  • #2,972
  • Edited 4:39pm Jan 14, 2020 6:00am | Edited 4:39pm
I shorted EURAUD based on other criteria I was developing (a sort of simple currency strength for short time frame M15 and such)

Anyway, there is a bearish divergence and an H4 TL and a break of small upward TL.

The pair, in general, is ranging in the Daily timeframe.

I was initially cautious if there is a possible right-hand shoulder developing support at the same level as the left one (marked by red arrows).

Because of the news this week, I will closely monitor the trade and move my stop loss to break even as soon as possible risking a possible bounce back closing the trade.

Edit: Made a 35 pip move which was great for M15 quick in and out.
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  • #2,973
  • Jan 14, 2020 7:20am Jan 14, 2020 7:20am
XAUAUD

I wanted to short this pair as it is bouncing off daily resistance and it met my criteria. I entered but I soon exited with a small loss.

What worried me was the fact of the bullish divergence that is slight on daily but more profound in 12 Hr and H4. So I told myself there might be a correction in H4 and better to wait for it to end and then reenter if the same criteria are met.
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  • #2,974
  • Jan 14, 2020 11:55am Jan 14, 2020 11:55am
A pair to watch closely.
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  • #2,975
  • Jan 14, 2020 1:13pm Jan 14, 2020 1:13pm
Quoting chamane
A pair to watch closely. {image}
R/R is not that great, chamane. Even 1/1 is a problem. What do you think?
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  • #2,976
  • Jan 14, 2020 4:10pm Jan 14, 2020 4:10pm
Quoting vitall
{quote} R/R is not that great, chamane. Even 1/1 is a problem. What do you think? {image}
That is a good point. You can still switch to the 30 min chart and take entries in the Trading Zone.
  • #2,977
  • Jan 14, 2020 6:24pm Jan 14, 2020 6:24pm
Quoting chamane
This approach is systematic and doesn't need to think too much. But there are many other ways to trade hidden divergence. {image}
In this example (AudNzd) would you want to see HD on the H4 to support long trades on the L/T? I ask because it looks like a potential HD forming on the H4 in the wrong direction.
Good Trading
  • #2,978
  • Jan 14, 2020 7:04pm Jan 14, 2020 7:04pm
Quoting aud
{quote} In this example (AudNzd) would you want to see HD on the H4 to support long trades on the L/T? I ask because it looks like a potential HD forming on the H4 in the wrong direction.

I myself when I see a breakout, I look for divergences against the setup on LTFs. So I can wait for a correction to end. This correction can be above the TL or just below it forming a pre-breakout.
However, sometimes the opposite divergence does not yield a good correction and I may miss the trade.

In the case of AUDNZD, I would wait. But others may have different views. It is subjective...
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  • #2,979
  • Jan 14, 2020 8:12pm Jan 14, 2020 8:12pm
Close to an entry signal or the start of a Trading Zone.
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  • #2,980
  • Jan 14, 2020 8:33pm Jan 14, 2020 8:33pm
Quoting aud
{quote} In this example (AudNzd) would you want to see HD on the H4 to support long trades on the L/T? I ask because it looks like a potential HD forming on the H4 in the wrong direction.
Hi Aud,

I'm not sure that I understood your question, but once in the Trading Zone, I keep trading all signals even if there is some reverse divergence developing. It doesn't mean that it will stand for long and price movement might invalidate it. In the case of AUDNZD, there were a few entry signal on tghe 30 min TF and we are in an overall winning situation so far. The Trading Zone is still active on the 4 HR TF.
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