Attachments: Universe of Divergences in Trading

Universe of Divergences in Trading

#1
First Post: Mar 18, 2021 5:39pm Mar 18, 2021 5:39pm

934rex
Joined Mar 2021 | Status: As long as the OUTCOME is INCOME... | 408 Posts

If you trade divergences, you are not alone.

I

Divergences on any TF a.k.a. Time Frame.

I use the WICK, cos it tells me that PA a.k.a. Price Action got there!

So, why leave our the wick? Is it that weak? I don't think so.

Attached are some various shapes and forms divergences can take. Will break it all down as we progress. Shoot me any questions you might have. Send me any screenSHOTS and I will help dig out the divergence[s] in it.

Enjoy my

FART.

As long as the OUTCOME is INCOME.. We are Gucci good

10Q

Let's Eat...

��

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#2
Apr 5, 2021 1:11pm Apr 5, 2021 1:11pm

kjmchc1010
| Joined Aug 2014 | Status: Trader | 23 Posts

I use divergence for EXIT confirm, not for entry

#3
Apr 5, 2021 9:21pm Apr 5, 2021 9:21pm

calaxcorp
| Joined Feb 2014 | Status: Trader | 80 Posts

Hi Rex,
So good, here is a place I can ask some divergence questions.
I don't think many traders noticed this. When we compare price being divergent from its oscillator (e.g. MACD or RSI), we usually draw trendlines based on swing H or swing L of price (including wigs), but to compare, the trendlines we draw on oscillators are based on the closing prices of the oscillators (completely ignoring the H or L of price). Is this inconsistency actually good or bad, and why?

If bad, how can we improve the technique?

Thanks for any insight.
~ Bill

#4
Apr 5, 2021 9:26pm Apr 5, 2021 9:26pm

scsstnt
Joined Aug 2018 | Status: Trader | 1,458 Posts

Quoting calaxcorp

Disliked

Hi Rex, So good, here is a place I can ask some divergence questions. I don't think many traders noticed this. When we compare price being divergent from its oscillator (e.g. MACD or RSI), we usually draw trendlines based on swing H or swing L of price (including wigs), but to compare, the trendlines we draw on oscillators are based on the closing prices of the oscillators (completely ignoring the H or L of price). Is this inconsistency actually good or bad, and why? If bad, how can we improve the technique? Thanks for any insight. ~ Bill

Ignored

Excellent question,Oscillator vs Price and its time delay regarding price action

#5
Apr 5, 2021 10:46pm Apr 5, 2021 10:46pm

Inthebox
Joined Jun 2010 | Status: Trader | 16,699 Posts

Quoting calaxcorp

Disliked

If bad, how can we improve the technique?

Ignored

if i may jump in. ignore if not relevant.

improve by having :
1. trend line
2. macd zero cross
3. divergences in both macd and osma for added confirmation

entries can be around trend line cross or macd zero cross or both to confirm.

regular divergence means reversal.
hidden or negative divergence means trend continuation (powerful in trending market).

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ITB - Seeing Orderliness amongst 'Randomness'

#6
Apr 6, 2021 12:58pm Apr 6, 2021 12:58pm

934rex
Joined Mar 2021 | Status: As long as the OUTCOME is INCOME... | 408 Posts

Quoting kjmchc1010

Disliked

I use divergence for EXIT confirm, not for entry

Ignored

I concur...

Could also be used for entry, for laddering��, for placing stop loss, for detecting a change in structure, for confirmation of reversal,, and for detecting retracement,... etc

10Q

#7
Apr 6, 2021 1:01pm Apr 6, 2021 1:01pm

934rex
Joined Mar 2021 | Status: As long as the OUTCOME is INCOME... | 408 Posts

Quoting calaxcorp

Disliked

Hi Rex, So good, here is a place I can ask some divergence questions. I don't think many traders noticed this. When we compare price being divergent from its oscillator (e.g. MACD or RSI), we usually draw trendlines based on swing H or swing L of price (including wigs), but to compare, the trendlines we draw on oscillators are based on the closing prices of the oscillators (completely ignoring the H or L of price). Is this inconsistency actually good or bad, and why? If bad, how can we improve the technique? Thanks for any insight. ~ Bill

Ignored

To avoid the inconsistency, I will suggest that you include the WICKS of the Price Action in the candlesticks when drawing your DivergenceTRENDLINES.

Great observation by the way.

10Q

#8
Apr 6, 2021 1:19pm Apr 6, 2021 1:19pm

934rex
Joined Mar 2021 | Status: As long as the OUTCOME is INCOME... | 408 Posts

Quoting Inthebox

Disliked

{quote} if i may jump in. ignore if not relevant. improve by having : 1. trend line 2. macd zero cross 3. divergences in both macd and osma for added confirmation entries can be around trend line cross or macd zero cross or both to confirm. regular divergence means reversal. hidden or negative divergence means trend continuation (powerful in trending market). {image}

Ignored

Great post.
This is not to tackle your opinion, it's just to share what I have experienced.

I also think that the Regular Divergence, BD, Bullish Divergence, or BRD, Bearish Divergence, may mean reversal, retracement, fakeout, or continuation... it depends on the asset being traded, market plays, momentum, Time Frame, or conditions.

Likewise, the HBRD, Hidden Bearish Divergence, could spell out continuation of trend, reversal, retracement, fakeout,.. etc

Sometimes, our seen or projected Divergence setups may playOUT, and sometimes they don't.

We just need to try to manage our trades using stopLOSS in place --- be it mental or real. I prefer real stopLOSS except I have decided to gamble or blow the account.