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EASY H1 trading using divergence and candle sticks

  • #41
  • Mar 21, 2012 9:32am Mar 21, 2012 9:32am
Quoting ZieG
The things i don't really understand is how do you know that divergence has taken place or not?

and what are the entry and exit rule??
ZieG,

You know there is divergence when the price moves one way and the oscillator, in this case the RSI moves the other way... In the chart below, look at the orange line. See how the price made a higher high and formed a pinbar (not so perfect but close enough to demo purposes) and RSI made a lower high? That is Divergence. So now you have a pinbar candle signalling possible reversal and at the same time you have RSI making a lower high, also signalling reversal. Also, RSI was above the 70 level and headed downward. So this is the setup we are looking for. Now we set a pending order Short a few pips below the low of the pinbar. SL is a few pips above the pinbar, and TP1 is equla to SL or nearest reistance/support level. That is all there is to it ... Very simple
Attached Image (click to enlarge)
Click to Enlarge Name: divergence_ej_example.jpg Size: 215 KB
  • #42
  • Mar 21, 2012 9:35am Mar 21, 2012 9:35am
Quoting Eureka
Very nice system. Seems to be a descent amount of setups.

Which pairs are you watching?

Thanks for sharing this. :-)

Carol

Hope you find this system useful Carol.


Normally I watch the majors plus eurjpy and gbpjpy.
  • #43
  • Mar 21, 2012 9:47am Mar 21, 2012 9:47am
Thanks.

  • #44
  • Mar 21, 2012 9:52am Mar 21, 2012 9:52am
sorry kamugi ... is that I am entering the forum, which is why you had not read

for you friend
Attached File(s)
File Type: mq4 TriangularMA centered abands alerts 2.mq4   9 KB | 1,691 downloads
File Type: mq4 Swing_ZZ.mq4   11 KB | 1,548 downloads
File Type: mq4 ZigZag.mq4   6 KB | 1,360 downloads
File Type: tpl zz 2012.tpl   11 KB | 1,397 downloads
  • #45
  • Mar 21, 2012 9:57am Mar 21, 2012 9:57am
This pair is now around previous support level. We may get a setup here so keep an eye on this pair for the next H1 bar to see what she does
  • #46
  • Mar 21, 2012 10:05am Mar 21, 2012 10:05am
Watching.........
  • #47
  • Mar 21, 2012 11:15am Mar 21, 2012 11:15am
Quoting PurePrice
This pair is now around previous support level. We may get a setup here so keep an eye on this pair for the next H1 bar to see what she does
LONG trade triggred as we had a bullish englufing candle right at previous support, which gives us a "triple A" setup
Attached Image (click to enlarge)
Click to Enlarge Name: divergence_au.jpg Size: 232 KB
  • #48
  • Mar 21, 2012 11:22am Mar 21, 2012 11:22am
Quoting PurePrice
LONG trade triggred as we had a bullish englufing candle right at previous support, which gives us a "triple A" setup

We need AU to get above 10457 (previous minor support now turned minor resistance) and it is lunch hour in NY. IT may be slow moving until these things occur keeping fingers crossed
  • #49
  • Mar 21, 2012 11:54am Mar 21, 2012 11:54am
Quoting porfirio
sorry kamugi ... is that I am entering the forum, which is why you had not read

for you friend
Thank you so much! for taking the time.. I'm greatly appreciate it sir! thank you!





If you have to make a mistake, make sure it is a new one
  • #50
  • Mar 21, 2012 2:15pm Mar 21, 2012 2:15pm
Thank you for showing this way of trading.
For the people having problems to identify divergence, maybe this might help.
Install the RSI indicator and after that install the divPeak indicator in the rsi windows.
Attached Image (click to enlarge)
Click to Enlarge Name: divergence indicators.gif Size: 31 KB
Attached File(s)
File Type: mq4 ind_DivPeakTroughRSI_SW_v1.mq4   11 KB | 1,784 downloads
File Type: mq4 ind_RSIColored_v1.mq4   5 KB | 1,626 downloads
To get more profit, not the entry but the exit will make the big difference
  • #51
  • Mar 21, 2012 3:41pm Mar 21, 2012 3:41pm
Quoting PurePrice
We need AU to get above 10457 (previous minor support now turned minor resistance) and it is lunch hour in NY. IT may be slow moving until these things occur keeping fingers crossed

Well it is almost closing of NY session, and just now, we are back at 1.0457. As expected, this price level did present a bit of challange and caused the price to drop about 20 pips from there down to 1.0437 or so. However, it bouncing back now and it has been very very slow as it was just at NY lunch time that the trade was triggered and as expected, market really slows down after that point in time. So, as it stands now, this trade is at +10 pips for me, but it is soo painfully slow moving
  • #52
  • Mar 21, 2012 8:41pm Mar 21, 2012 8:41pm
Quoting PurePrice
Well it is almost closing of NY session, and just now, we are back at 1.0457. As expected, this price level did present a bit of challange and caused the price to drop about 20 pips from there down to 1.0437 or so. However, it bouncing back now and it has been very very slow as it was just at NY lunch time that the trade was triggered and as expected, market really slows down after that point in time. So, as it stands now, this trade is at +10 pips for me, but it is soo painfully slow moving

This trade is now +30 pips for a TP1. SL moved to BE on remainder and TP2 would be 1.0495 just shy of the 1.0500 round number
  • #53
  • Mar 21, 2012 11:33pm Mar 21, 2012 11:33pm
How we know that price won't go down more? ( for AUDUSD ). Should we wait for bulish candle for next candle?
  • #54
  • Mar 22, 2012 2:55am Mar 22, 2012 2:55am
Divergence trading is actually one of the most basic trading method out there, but sadly few people know its powers. I've been using nothing but OsMA, fibs, trendlines on h4 and daily with success for the past 10 months.

Beats MA anyday.

It also helps you to build some market sense. In what ways? U'll have to find it out yourself.
  • #55
  • Mar 22, 2012 3:06am Mar 22, 2012 3:06am
Good Morning @ all,

ahh, missed this small Setup for some early pips...

E/U H1:

Attached Image (click to enlarge)
Click to Enlarge Name: divergence-2203.gif Size: 13 KB



Regards...

Chriss
  • #56
  • Mar 22, 2012 3:52am Mar 22, 2012 3:52am
Hi pureprice,
nice and clean method.. thanks for sharing!

Beauty of 2b pattern with divergence into demand zone,
forming right now on aussie..

all the b
chriz
Attached Image (click to enlarge)
Click to Enlarge Name: au-usd.gif Size: 27 KB
  • #57
  • Mar 22, 2012 11:06am Mar 22, 2012 11:06am
Hi Pure Price,

Thank you for a such a simple system. One of the few systems that worked as soon as I tried it.

I tried it Yesterday on EurJpy and it worked like a charm.

Thank you RPV for your indicators, I did not use them yet, but will try them.

Pure Price, Is this okay to also try it on daily charts?

thanks
  • #58
  • Mar 22, 2012 11:15am Mar 22, 2012 11:15am
what do you think sir Pure price?

thank you so much!

http://i42.tinypic.com/m0v7m.jpg
If you have to make a mistake, make sure it is a new one
  • #59
  • Mar 22, 2012 12:15pm Mar 22, 2012 12:15pm
Quoting forexnubie
Hi Pure Price,

Thank you for a such a simple system. One of the few systems that worked as soon as I tried it.

I tried it Yesterday on EurJpy and it worked like a charm.

Thank you RPV for your indicators, I did not use them yet, but will try them.

Pure Price, Is this okay to also try it on daily charts?

thanks

I am glad you feel that way.

This works on daily as well, of course if you have the patience and ability to withstand a large StopLoss. Daily is likely even better than H1 because you filter out all the intraday noise, and you dont need to watch the charts during the day, which is perfect for someone working fulltime job and wants to trade.
  • #60
  • Mar 22, 2012 12:17pm Mar 22, 2012 12:17pm
Quoting Komugi
what do you think sir Pure price?

thank you so much!

http://i42.tinypic.com/m0v7m.jpg

This is done perfectly
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