What To Pair Divergence With?

Quoting Nico1359

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If So are there any indicators (mt4 or TradingView) that you like to use in conjunction with divergence?

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Quoting Thomas.

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In my case i look at the VIX while trading indicies, on top of that i follow fundamentals. Here a example on how a bias can be formed, the vix is dropping and creating a bullish divergence while unemployment claims beat expectations from 236k forcast to 261k release (bad News) The combination of the VIX going down and giving signs of a reversal, indicies going up while having negative fundamentals is a bear cycle building up in my eyes, the higher markets go now, the better i feel about short positions. Thats where a divergence can Start to make...

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Quoting Inthebox

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{quote} Is is difficult to use only words to show clarity in explanation. Why don't you provide a chart with time frame to show how you would do it. Others can then use that chart to add whatever that they are using. Then you can keep those that suit your personality and discard the rest

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Quoting Nico1359

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The obvious answer that most will come up with is support/resistance, but I'm trying to arrive at something a little more mechanical. S/R is far too subjective to me. I can draw 5 lines that appear valid to me while another trader could draw 5 completely different lines on the same chart that seem valid to him... So are there any indicators (mt4 or TradingView) that you like to use in conjunction with divergence?

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Quoting Nico1359

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If you're looking to trade reversals - I think divergences are a pretty well-known way to do so. But, whenever you come across any discourse on the matter of divergence, it always ends in the same refrain - "you should never trade based off divergences alone".... This leads me to the question - what should we pair with divergences to filter the best setups? The obvious answer that most will come up with is support/resistance, but I'm trying to arrive at something a little more mechanical. S/R is far too subjective to me. I can draw 5 lines that...

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Quoting Nico1359

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{quote} Sounds like a reasonable approach, but perhaps a little more suited to higher timeframes... Personally, I trade on the 5-minute charts and am targeting reversals in the 20 pips or so range. Also, as I target smaller moves on the lower timeframe - I'm not looking to trade in or around news releases.

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Quoting Thomas.

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{quote} There is no reason to limit your self. For example, you wouldent want to take a bullish 5min divergence against a running 4h bearish divergence. I would always look at all timeframes and collect Date to make the best decission posisble and leave as little as possible to luck or random outcomes Becouse longterm you can't put money behind random simple patterns, i would try to bring as much quality as possible, becouse only that is scalable without increasing quantity of trades, you should only put money behind quality. For example in my case...

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Quoting Nico1359

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{quote} Good advice. So perhaps the answer is not so much another indicator to pair with divergences, but rather matching divergences with those on higher timeframes. I don't trade indices, so don't necessarily think the vix considerations would dictate trade setups for me. But I do understand that there can be correlations though with USD based pairs.

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