Stoch divergence and S/R journal

Hi there,
I'll be posting my daily trades here using stochastic divergence across 5 min/15min/30min/1hr/4hr/daily timeframes. Trades will be taken off Support and Resistance levels, and preferably taken with the trend.

I'm doing this as it will hopefully give me some discipline. My losing trades will also be posted, and that's just embarrassing so should help me take trades that only fit my system.

EDIT
What's the system?

Pretty simple, look up stochastic divergence!
I also like to 'try' (hmmm you'll see that isn't always the case) to trade with the prevailing trend.

So, what do I do.

I 'try' (ha that one again) to trade when the price makes a low or high, and the stochs are at/near the 80/20 levels on 5mim/15 min charts.

The stochs will then turn up/down with price to show a change in direction.
I DO NOT TRADE AT THIS POINT.

So, as an example, in the case of a sell, a new high will be made, stochs will be near 80, on the 5 min and 15 min chart (my favourite settings), and then price will start to fall back. I DO NOT TRADE AT THIS POINT.

Prices will then stop and go back up to make a new high, and if the new high is made, with divergence on either the 5 min or 15 min chart (preferably both), then i will enter the trade. I rarely enter if there is just divergence showing on the 5 min chart as this is very choppy. When the signal is given on both charts then it is far stronger.

Note that trades should be with the prevailing trend (so the overall trend in this example should be down). It is also important to trade into Resistance (for a sell). The examples I give in the journal should show you what I mean.

Settings
5 min Chart stochs 8/2/2
15 min charts stochs 8/3/3

NOTE: If divergence occurs on the 15 min chart then this is a very good signal. Trades can be taken with 15 min divergence (pref with some proof showing on the 30min/1 hour chart) even if it does not show up on the 5 min chart.

I also highly recommend you read the Nobraintertrades blog, with descriptions of common chart formations, especially the teacup, quasimodo and the bottom of the barrel.

Also, I do not trade (ha! that one again) between 10.30am-12.30pm UK time as liquidity tends to decrease and prices can just get stuck.

I think thats it, I hope this journal teaches me some discipline, and maybe helps some people looking to analyse/understand price action and what an undisciplined trader looks like!

Ist trade, short EURGBP at 0.8650.

Reason-massive stoch divergence on 1 hour chart, divergence on 30 min chart. Has reached prev resistance (see daily and 4 hr chart).
Reasons to be fearful-it is against the main trend so not a perfect trade, but with such large divergence on 1 hour/30 min + SR level, it seems a worthwhile trade.
First TP level .8605

Strong divergence on 5 min chart and price is approaching 50% level BUT!!!

I don't enter just on 5 min divergence, it's too choppy/interchangeable. I want to see it replicated on the 15 min chart as well. And while it looks like something is going on, there is no new high made but with a much lower stoch reading so I'll pass. There has to be an obvious/visible divergence on the stochs, combined with a new low/high, in order to get me to trade.

Revised first TP level up to .8620 as is in an area of previous Resistance level,

Have also taken a hedging bet long on EURGBP, stoch divergence on 15 and 30 min chart which is with the overall trend-see charts below.
No divergence on 5 min chart which would be ideal.
Not ideal to be both long and short I know, but playing the stoch divergence when it's with the overall trend is a good idea. I'm less certain of the trade as there is no divergence on the 5 min chart, but we shall see....

Price has moved into resistance, 15 min not showing much divergence but there is some, same with 5 min chart.
1 min chart showing all the signs of a lovely reversal formation. Buy at 1.3677.

First example of lack of discipline, there is not much real divergence on these charts-I've been swayed buy the Resistance zone, price behaviour around it, the fact that the 30 min stoch is also moving into oversold territory,and the stoch behaviour on 15min/5min charts.
Let's see how this pans out.

yet another lesson learned....

Am still short on this so it's working out ok. Ish.

yes it's just before news but....
eurgbp weakness
big 15 min divergence
less so on 5 min
Price 'should' bounce off 15 min resistance.
News could f**k this up bigtime though

2nd TP reached at .8600
Am still in 50%-stoch divergence is a strong signal-I like to take some profits early, but like to leave as much as I can on the table to maximise the risk/reward.

@ 1.5898 (take some off the table at an 00 number).

SL moved up slightly-no free trade yet. Would like to see this move up to 1.5950 but might not happen in this session

Am twitchy as this trade is against the strong move upwards and price is resting on /near some TLs (see below). Final profit taken at 0.8590 (approx 60 pips). Not a great RR ratio on this one, I like to hold on for longer, have an eary profit target and just let the trade run, rather than scale out of the trade. But as it's against the trend, I think it's prudent to take profits off the table.

First profit taken at +40 points a nice 2.5:1 RR, then I moved stop to breakeven and let it ride. Price came down and took out the SL, then price reversed back up to where I would've had my final, and big, profit target with over 2/3 of the trade still on at approx 4:1 RR.
One thing I'm seriously thinking about is NOT moving a trade to breakeven/a free trade as soon as a certain level is reached. I think you've got to keep the SL, or if you do move it up, then not too much, to give your trade some room to work. The big boys know we're following in their footsteps, and will try to shake us out-this one is a good example.

Currently looking at gbusd for a long thanks to 15 min divergence and USCHF for a short (VERY strong divergence on this on 5/15/30 min tfs).

BUT discipline is taking hold-I like to see price move lower or higher and then show strong divergence after the fact, preferably on the 5 min as well as the 15 min for confirmation.

Price on USCHF has not broken to new highs with this stoch divergence so I'll pass.

Also, it really looks like it wants to break higher on longer term charts....

Strong 15 min divergence on both, and both are trading in resistance areas.
Also, for EURUSD, lovely 5 min divergence as well, so this is the stronger trade, especially with EURGBP looking like it wanted to rise.
Entry eurusd 1.3662
Entry GBPUSD 1.5910
ANd then I freaked and closed both out at 10 pips profit.
On reflection, the EURUSD should have been theonly trade to take, as it filled the criteria for divergence on 5min and 15 min charts. I wasn't happy with it though, as it was a very sharp/violent down move this morning, and they're not normally good for business. I was wrong on this one, but also kind of right too. There will be better set ups, with smoother price action.
As i read somewhere "better to be out rahter than in and regretting it."
See chart below for EURUSD set up.

Showing strong divergence on 4 hour and 1 hour charts, pointing at a move down.
Clearly it's against the longterm trend, so if it occurs, timing is everything. Also, price on the selling side is more apt to reverse on you as buyers come in to maintain the trend. Unless I see something awesome i won't be taking a position, but it's good to have this info in mind....

Price is also at an area of resistance when you look at a daily chart, the lows of 20th and 27th October. Looks like it could drop from here, I'll be watching closely

Aahhhh I talk myself into these things with my analysis...
Sell position opened at 36.88 - first TP .3651

Slight divergence on 5 min chart, price was moving into resistance zone after earlier sharp drop (which indicates a lack of buying appetite). Also in the key 50/62% fib retracement zone. And all the longterm stuff I was talking about, so have taken the short. Let's see how this one pans out

That's a record-stopped out already by some news which isn't showing up on any calendar?!
Note to self, stay with the trend, don't anticipate the turn of a longterm trend before it's happened. Wait for it, then jump on board.
Still, if I had kept the original long I opened up I'd be quids in. Discipline discipline discipline....

So they've both shot up and would have given me about 4 or 5:1 RR.
Need to stick to keeping with the trend and trading divergence on 15 min like I'm supposed to.

Missed it because I was faffing around. What was that discipline thing again?
Divergence on 5 min, big divergence on 15 min and 30 min, against the trend BUT with such strong divergence on 3 timeframes+1 hour stoch moving into overbought area+price reaching resistance levels (just look at a 1 hour chart) I'd have been all over this.