Cable, MACD + RSI Divergence Wassssssup? | Forex Factory

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Cable, MACD + RSI Divergence Wassssssup?

  • #1
  • First Post: May 12, 2006 12:17am May 12, 2006 12:17am
Ok here is the deal. From everything I have been taught in my short tenure as a Forex Wizzard, divergence like this is suposed to portend a change in direction. (MrWhipple glances up to consult the Auguries) I have been getting my clock cleaned for the past couple of days looking for this anticipated downdraft. This mornings upswing was all news to be sure, and I should have cought that, but I ran out of Pepsi at midnite, and I wasn't paying attention.

The bottom line is this... Is it just me or is anybody else confused.

Just an idea but as noted on the chart with the arrows, did the cable just switch to a new channel.
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Nolite dormiens pungere ursum. -- Latan Proverb.
  • #2
  • May 12, 2006 12:46am May 12, 2006 12:46am
Quoting MrWhipple
Ok here is the deal. From everything I have been taught in my short tenure as a Forex Wizzard, divergence like this is suposed to portend a change in direction. (MrWhipple glances up to consult the Auguries) I have been getting my clock cleaned for the past couple of days looking for this anticipated downdraft. This mornings upswing was all news to be sure, and I should have cought that, but I ran out of Pepsi at midnite, and I wasn't paying attention.

The bottom line is this... Is it just me or is anybody else confused.

Just an idea but as noted on the chart with the arrows, did the cable just switch to a new channel.

divergence signals will kill you in a real strong trend unless you have something to go with it. i was burned with this same scenario more times than i can count early on.
  • #3
  • May 12, 2006 1:01am May 12, 2006 1:01am
your a smart guy whip so perhaps im showing stuff you already know.
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  • #4
  • May 12, 2006 7:16am May 12, 2006 7:16am
Quoting james16
your a smart guy whip .
You flatter james, I am more of a smart equine on the smallish side.

I think I might have found some answers over at Action Forex in their daily briefing: and I quote

One more important point to note is that dollar's fall yesterday has brought dollar out of recent divergence condition. In such kind of situation where dollar is deeply oversold but getting out of divergence without really having a correction, odds for further sharp decline has greatly increased. And a disappointing trade deficit figure could be that stimulus.

They go on to say in the GBP/USD section:

One important thing to note is that previous mentioned bearish divergence condition hasn't been able to push cable to below 1.8508 support and no correction started. Subsequent rally has now pushed 4 hours MACD above it's own falling trend line, thus neutralizing the divergence condition.

So I guess that is it: divergence over, no downdraft, I get my but kicked, end of story. So sad, but you learn something everyday.
Nolite dormiens pungere ursum. -- Latan Proverb.
  • #5
  • May 12, 2006 7:37am May 12, 2006 7:37am
mr whipple,

your example is just textbook, cause selling on mom div is a SCALP ONLY !! means small objective and tight stops....while buying into new highs can have a bigger objective and a wider stop...just my eyes.
  • #6
  • May 12, 2006 7:40am May 12, 2006 7:40am
MrWhipple, don't assume those guys will be right, they are wrong just as many times as they are right, I can assure you from a lot of experience early in my trading career. Make your judgement and stick with it Best of luck.
You can quit and they won't care, but you will always know.
  • #7
  • May 12, 2006 3:41pm May 12, 2006 3:41pm
Well I had some fun on the cable roller coster this morning anyway. Made my dough back with a quick trigger finger and a lot of luck.

Ended the week ++ so I can get my wifey pizza for date nite tonite after the play. (or what passes for theatre in Rio Lindia CA USA)
Nolite dormiens pungere ursum. -- Latan Proverb.
  • #8
  • Apr 9, 2008 4:54am Apr 9, 2008 4:54am
Hello,

Your Idea seem brilliant combining both MACD & RSI Divergence to know price direction. Can you please post your RSI Divergence indicator.
Thanks
  • #9
  • Dec 24, 2008 6:53pm Dec 24, 2008 6:53pm
Guys, I beleive divergence will always be a strong technical signal. In combination with trend indicators (MA) it can give you profitable trading system. I usually trade divergences in the direction of main trend. In general, combine divergence and some other indicators, and you should never loose. BTW, you can use this free stock screener to find RSI divergences:
http://www.marketinout.com/screens/i...php?picker=rsi
  • #10
  • Dec 24, 2008 9:01pm Dec 24, 2008 9:01pm
divergence; is tricky. I would not touch unless 3 point.
Your better trading retracements in a trend. -- playin turns are no way to make a living.
8-12 bars in a retracemnt is the easiest way to count.4 bars for a minor
  • #11
  • Last Post: Jan 17, 2012 4:26am Jan 17, 2012 4:26am
Actually, once a divergence is clearly visible, one should look for a confirmation to signal an actual reversal. A bearish divergence can be confirmed if the price breaks through a support level or if the oscillator also breaks a key level or line. Ditto for a bullish divergence - confirm with a price moving up over a resistance line or the oscillator breaking out.
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