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Hidden divergence

  • #4,721
  • Dec 29, 2020 2:30pm Dec 29, 2020 2:30pm
Quoting dany78
I wait cross trendline and long....really good signal in my book i like hidden divergence ; In my opinion, it's one of, if not the most powerful signal in trading. {image} {image}
Is it possible to anticipate in advance (any repeated patterns) ?
  • #4,722
  • Dec 29, 2020 11:32pm Dec 29, 2020 11:32pm
Took the demo trade based on chamane trading rules in #4710 post. HD on the daily chart. Reached tp 1 and now adjusted the two stop losses to 3 candles below the recent candle(Trailing stop) until it reach the next tp or not. I didn't use the cost averaging method. I just enter the trade on the lower tf (H4). Either way, this trade was profitable.

I need to do more backtesting before getting into live market.

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  • #4,723
  • Edited 3:12am Dec 30, 2020 2:59am | Edited 3:12am
Entering a trade is half a coin.
Trailing and TP are even more difficult.(in my humble).

You need a set of rules ...and of course, they need to be respected.

Scaling out is very popular, and feels easier for your "peace of mind".
But it mostly works against your bottom line.

Thereīs an old trading rule: "keep your losers small, your winners big."
Scaling out does exactly the opposite: you make sure you get hit with a full load if stopped out in the beginning. But your best winners are only half a load.

Scaling in is mathematically better. You enter 1 lot (micro, mini, whatever your size), add if it goes your way, add 1 or more..
At the same time slowly moving your stop, to avoid getting stopped -out on the whole load.
Easier said than done. Market might not always give you a next entry opportunity.It needs carefull planning, study, backtesting and practice.The shorter the TF the harder, cause you need time to analyze the "campaign" as it unfolds.

Take a few of the last trades you took, and backtest the difference, scaling in and scaling out, and taking profit on your best target.
Granted, there are many successfull traders that scale out.
It also depends on your system, your TF, your horizon..etc...
Scaling out in my humble, must be understood as 2 systems, one short, one long term.Then analyzed separately.
Once I studied the system and examples of a very experinced trader, selling a weekly trading coach and signal subscription.He was scaling out.
I calculated exactly both systems sepataedly. Guess what:the short time strategy was hardly breaking even, the long term was profitable.So effectively, he was waistng time and resources on the short time system.
I also calculated what would have happened, if he would have kept the initial double amount all the way on his long term system. The profits almost doubled!
But beware, it depends on your whole trading plan.
  • #4,724
  • Dec 30, 2020 8:39am Dec 30, 2020 8:39am
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gold maybe up?
  • #4,725
  • Dec 30, 2020 9:04am Dec 30, 2020 9:04am
Quoting hiddendiv
{image}gold maybe up?
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now confirmed TL broken, price above ichimoku cloud, chikou span above PA..
  • #4,726
  • Dec 30, 2020 9:16am Dec 30, 2020 9:16am
Quoting hiddendiv
{image}gold maybe up?
We have to beware of the resistance zone. I would wait to see if price wants to break the trendline.
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  • #4,727
  • Dec 30, 2020 12:33pm Dec 30, 2020 12:33pm
One of my filters is S/R
You might want to watch this video on the subject. Again, putting the odds in your favor.
If you get a HD signal, then you add S/R, then you use a proven trigger (or 2), to start your campaign...

(Btw. if you watch carefully in the video, he uses a MACD strategy to enter, and his signal on the example was also a HD)

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  • #4,728
  • Edited 7:07pm Dec 30, 2020 6:29pm | Edited 7:07pm
Quoting cuchuflito
One of my filters is S/R You might want to watch this video on the subject. Again, putting the odds in your favor. If you get a HD signal, then you add S/R, then you use a proven trigger (or 2), to start your campaign... (Btw. if you watch carefully in the video, he uses a MACD strategy to enter, and his signal on the example was also a HD) https://www.youtube.com/watch?v=HTd4...el=TRADINGRUSH
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after TL break we enter long on another hidden div at smaller TF on retracement and banked 110 pips.

I do agree by using SNR, but we have decent TL break on H4 with retracement and hidden div formed at lower TF, that give you confidence to go long. We bank in pips 1st and we will see what happen when price reach the SNR area, maybe regular div appear for reversal who knows, my mentor had once told me, we take whatever the market give 1st, the goal is to make $
  • #4,729
  • Jan 2, 2021 7:42am Jan 2, 2021 7:42am
Quoting chamane
{quote} We have to beware of the resistance zone. I would wait to see if price wants to break the trendline. {image}
Another look at Gold, a bigger picture. A bullish HD pattern on the Monthly chart and a bullish RD pattern on the Weekly. A MACD zero line cross will be a signal for me to start taking trades on the 4HR chart.
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  • #4,730
  • Jan 3, 2021 1:16pm Jan 3, 2021 1:16pm
A pair to check on shorter timeframes.
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  • #4,731
  • Jan 4, 2021 8:51am Jan 4, 2021 8:51am
A potential bullish HD pattern setup with NZDCAD.
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  • #4,732
  • Jan 4, 2021 10:06am Jan 4, 2021 10:06am
Quoting chamane
A potential bullish HD pattern setup with NZDCAD. {image}
D1 is bearish divergence. Which one to follow ??
  • #4,733
  • Jan 4, 2021 10:06am Jan 4, 2021 10:06am
Quoting chamane
A potential bullish HD pattern setup with NZDCAD. {image}
Hi chamane, how do you enter a trade order? Do you use (buy/sell) limit, stop or market order? Do you enter at the wick of a closed candle or body of a closed candle during lower time frame trading zone? Thank you.
  • #4,734
  • Jan 4, 2021 10:23am Jan 4, 2021 10:23am
Quoting Ah-Ong
{quote} D1 is bearish divergence. Which one to follow ??
Hi Ah-Ong,

We should follow where price is going. The higher timeframe is stronger than the lower ones, but we need confirmation convergence signals before entering a trade. The Daily chart shows signs of a bearish regular divergence, but we need breaks of trendlines and price action to confirm the reversal. Right now, I don't see any. On the 4HR chart, the HD pattern is still under formation. I am waiting for confirmation signals on the 1HR TF. I see that there is some room till price reaches the next resistance level, giving a RR greater than 1:1. If price decides to go south, it will invalidate the HD pattern on the 4 HR TF and we will probably see bearish confirmation signals.
  • #4,735
  • Jan 4, 2021 10:29am Jan 4, 2021 10:29am
Quoting RayV
{quote} Hi chamane, how do you enter a trade order? Do you use (buy/sell) limit, stop or market order? Do you enter at the wick of a closed candle or body of a closed candle during lower time frame trading zone? Thank you.
Hi RayV,

I enter at the close of a candle when price crosses a trendline or when MACD crosses the zero line on the next lower timeframe, the latter being my favorite. Usually the MACD zero line cross comes after the break of a trendline, but not always. Sometimes it comes before and then I wait for price to cross the trendline. When in the Trading Zone, I wait for the MACD zero line cross only.
  • #4,736
  • Jan 5, 2021 1:07am Jan 5, 2021 1:07am
Quoting chamane
{quote} Hi RayV, I enter at the close of a candle when price crosses a trendline or when MACD crosses the zero line on the next lower timeframe, the latter being my favorite. Usually the MACD zero line cross comes after the break of a trendline, but not always. Sometimes it comes before and then I wait for price to cross the trendline. When in the Trading Zone, I wait for the MACD zero line cross only.
Thank you chamane. For the NZDCAD setup that you mentioned above, I saw similar HD setup on H4 in NZDUSD instead. Both indicators showing HD signals. 38.2 fibonacci, and no RD on H1, basically similar to NZDCAD but for NZDUSD I got stopped out because the price moved further downwards after the trend line break and MACD zero line cross on H1, whereas the NZDCAD didn't.

So I'm curious, did you look into this NZDUSD pair and avoid it or you simply didn't notice since both setup pair are similar but one got stopped out but another didn't or did I fail to notice something important or is it simply just a losing trade? Thank you.
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  • #4,737
  • Edited 4:44am Jan 5, 2021 2:53am | Edited 4:44am
eur-gbp h1 hd
closed one and will se what with second half
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edit
regular on h1 also
this may be interesting

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  • #4,738
  • Jan 5, 2021 5:04am Jan 5, 2021 5:04am
Hope you all pay attention to "Stop Running" . Pacman syndrome.
Hereīs some obvious exapmles on a 15 min. chart.
The Market fuels on retail stops. I donīt mean avoid using stops though!
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  • #4,739
  • Jan 5, 2021 8:55am Jan 5, 2021 8:55am
Quoting RayV
{quote} Thank you chamane. For the NZDCAD setup that you mentioned above, I saw similar HD setup on H4 in NZDUSD instead. Both indicators showing HD signals. 38.2 fibonacci, and no RD on H1, basically similar to NZDCAD but for NZDUSD I got stopped out because the price moved further downwards after the trend line break and MACD zero line cross on H1, whereas the NZDCAD didn't. So I'm curious, did you look into this NZDUSD pair and avoid it or you simply didn't notice since both setup pair are similar but one got stopped out but another didn't or...
Hi RayV,

In my opinion, both setups were good. For no particular reason, I entered on NZDCAD but not on NZDUSD. Price reversed on NZDUSD and that's part of losses we should accept, as long as they are less than 2% of our account. This is when I like to use a Cost Averaging approach in the Trading Zone (TZ). I marked two TZ on the 1HR and 5 min charts. Entry signals are shown at the vertical bars. There are one or two losses, but in most cases, it would have given a small gain when bringing the stop loss to breakeven after price reached half the risk. That's how I manage my money. That's what happened with my NZDCAD trade. I made a few pips after bringing my stop loss to BE on the 1HR chart. I did not trade in the TZ because the 7 pip spread my broker offers me for that pair is way too high for trading the 5 min chart.
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  • #4,740
  • Jan 5, 2021 1:50pm Jan 5, 2021 1:50pm
Securing the trade.
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