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EASY H1 trading using divergence and candle sticks

  • #721
  • May 4, 2012 3:34am May 4, 2012 3:34am
Quoting bluemosaic
Thanks for posting. I notice that the RSI divergence start point was not below 30. Do you take any divergence or normally keep to the < 30 or > 70 rule used within this thread?
Oh no looks like I messed up. I didnt know that PurePrice only take divergence in OB/OS territory. Thanks for the point out, need to study more.
  • #722
  • May 4, 2012 3:35am May 4, 2012 3:35am
Quoting bluemosaic
Thanks for posting. I notice that the RSI divergence start point was not below 30. Do you take any divergence or normally keep to the < 30 or > 70 rule used within this thread?

The divergence shown is hidden/continuation divergence - with trend so does not need to have the 70 30 rule. That rule, i believe, is for regular divergence which happens at end of trends ie extremes. PP posted about this once we started talking about hidden.

Quoting PurePrice
Likely with hidden divergence you are not to be at overbought or oversold levels. So, yes, we will not look for those 30 or 70 levels with hidden divergence, but if it is there, then that is bonus
  • #723
  • May 4, 2012 3:36am May 4, 2012 3:36am
AU Bull div forming@H4
  • #724
  • May 4, 2012 5:00am May 4, 2012 5:00am
Quoting julie1585
The divergence shown is hidden/continuation divergence - with trend so does not need to have the 70 30 rule. That rule, i believe, is for regular divergence which happens at end of trends ie extremes. PP posted about this once we started talking about hidden.
Thanks for making it clear.

Anyway, looks like another regular long trade divergence came out on eurusd H1. Hard day to trade today eh. Will close shorts and open long if the price reach 1.3140. If not then I just hold onto the shorts.
Attached Image (click to enlarge)
Click to Enlarge Name: eurusd h1 div.gif Size: 18 KB
  • #725
  • May 4, 2012 7:22am May 4, 2012 7:22am
Very risky......very silly perhaps.....but I am testing.....

+15 on NZD and +15 on AUD...
Attached Images
The things which hurt, instruct! - Benjamin Franklin
  • #726
  • May 4, 2012 7:48am May 4, 2012 7:48am
Aww slow nfp reaction. Anyway eurusd short hit sl for about +16. Open long to play the other bullish divergence. I entered quite late but well why not.. Opened at .3147 sl 30pips below.

Hope it turns out good for me. Cheers
Attached Image (click to enlarge)
Click to Enlarge Name: eurusd h1 div.gif Size: 18 KB
  • #727
  • May 4, 2012 7:54am May 4, 2012 7:54am
Quoting Madscientist
Aww slow nfp reaction. Anyway eurusd short hit sl for about +16. Open long to play the other bullish divergence. I entered quite late but well why not.. Opened at .3147 sl 30pips below.

Hope it turns out good for me. Cheers
My fingers are crossed for you!!
The things which hurt, instruct! - Benjamin Franklin
  • #728
  • May 4, 2012 9:15am May 4, 2012 9:15am
very good thread, thanks.
  • #729
  • Edited 10:23am May 4, 2012 10:01am | Edited 10:23am
Just want to update on the trades I took just now when I when to have some dinner (sorry can't post my trades on the spot). Closed long for like +11pips,not much.

Its scary to see such a kick on the resistance. After that saw a little divergence on eurusd (note that 1st top on the price is higher and 1st top on rsi is lower), I took the trade at the bottom of the small candle.

I'm not sure the middle candle is categorized as a reversal candle/pattern. Just for scalp, Ill close it when the price goes near .3100. Cheers guys and have a nice weekend)

Edit: closed all position.
Attached Image (click to enlarge)
Click to Enlarge Name: eurusd h1 div.gif Size: 18 KB
  • #730
  • May 4, 2012 8:06pm May 4, 2012 8:06pm
Slow ending to the week. Didn't see any trades I liked over the last couple days. But at least I ended the week a little bit positive. Hopefully see some more opportunities next week. Have a nice weekend, all!

Scott
Prices are never too high to begin buying or too low to begin selling.
  • #731
  • May 6, 2012 10:31am May 6, 2012 10:31am
If I was to carry out this method on a 4hr or daily chart would the RSI setting be 7 the same as the 1hr chart.
  • #732
  • May 6, 2012 11:48am May 6, 2012 11:48am
Yes, Don, it would be the same.

Scott

Quoting don555
If I was to carry out this method on a 4hr or daily chart would the RSI setting be 7 the same as the 1hr chart.
Prices are never too high to begin buying or too low to begin selling.
  • #733
  • May 6, 2012 7:29pm May 6, 2012 7:29pm
See chart...

Olu
Attached Image (click to enlarge)
Click to Enlarge Name: usdjpy-4h-07052012-0125uk.jpg Size: 94 KB
If you think you can or cannot do it you are correct
  • #734
  • May 6, 2012 11:44pm May 6, 2012 11:44pm
Hey folks nice and active thread right here. From my backtest this year I have been getting good results with 75% win rate for 6 pairs on average, with 1% risk pertrade it got me 30% to date this year.(I am now forward testing to verify statistics) I just want to bring up an observation. I notice the Range Breaker method from Razorman which PurePrice drew his inspiration from draws his trend line from the close or open of the bars NOT the wicks. I notice many of you drawing from the wicks

For a while I have been trying to figure out why and I realize that the RSI you guys are using is calculating from the close/open of the bar not the wick. An equally important point, divergence detects trend deceleration which signals a trend change. So it makes total sense to draw TLs from the close/open not the wicks. Because if we measure from the wicks the RSI won't necessarily detect the deceleration.

If you don't understand me I will bring up some charts....

I look forward to hear from you all.
Riding the order flow
  • #735
  • Edited 6:18am May 7, 2012 2:31am | Edited 6:18am
Hi, everyone.. This is my first post.

Possible trade on EURNZD: pinbar and bearish divergence on stochastic oscillator. TF- daily.

  • #736
  • May 7, 2012 2:33am May 7, 2012 2:33am
In GY there was a div with a bullish engulfing for a trigger. I missed it, I was having lunch.(I should start trading it off my IPAD)

This is a good example to point out the fact that divs indicate deceleration. Notice the difference between the gradient of the yellow trend line and the red one? Well that it self triggered the divergence.
Attached Image (click to enlarge)
Click to Enlarge Name: 7123922 Interbank FX Trader 4 - Demo Account - [GBPJPY,H1]_2012-05-07_15-29-04.jpg Size: 169 KB
Riding the order flow
  • #737
  • May 7, 2012 2:42am May 7, 2012 2:42am
Quoting Binyamin
In GY there was a div with a bullish engulfing for a trigger. I missed it, I was having lunch.(I should start trading it off my IPAD)

This is a good example to point out the fact that divs indicate deceleration. Notice the difference between the gradient of the yellow trend line and the red one? Well that it self triggered the divergence.
You should also draw divergence from the same points on both the chart and the indicator to tell if there is divergence or not, your points in that chart are not drawn from the same.
  • #738
  • Edited 3:07am May 7, 2012 2:47am | Edited 3:07am
Quoting Binyamin
Hey folks nice and active thread right here. From my backtest this year I have been getting good results with 75% win rate for 6 pairs on average, with 1% risk pertrade it got me 30% to date this year.(I am now forward testing to verify statistics) I just want to bring up an observation. I notice the Range Breaker method from Razorman which PurePrice drew his inspiration from draws his trend line from the close or open of the bars NOT the wicks. I notice many of you drawing from the wicks

For a while I have been trying to figure out why and I...
Hi Binyamin.
May I ask, when you're doing the backtest, did you take the divergence including the wicks or only took divergence from the open/close of the candles?

Anyway, I saw a bearish hidden divergence in the making on gbpusd H1.. Will keep an eye on that..

Edit: opened a short trade on gbpusd at .6133 sl around .6160..
  • #739
  • May 7, 2012 3:14am May 7, 2012 3:14am
Quoting Madscientist
Hi Binyamin.
May I ask, when you're doing the backtest, did you take the divergence including the wicks or only took divergence from the open/close of the candles?

Anyway, I saw a bearish hidden divergence in the making on gbpusd H1.. Will keep an eye on that..

Edit: opened a short trade on gbpusd at .6133 sl around .6160..
I draw my TL only from the open/close in my backtest. Nice spot in GU btw. There is a double top in M15 too.
Riding the order flow
  • #740
  • May 7, 2012 3:20am May 7, 2012 3:20am
Quoting ohammond
You should also draw divergence from the same points on both the chart and the indicator to tell if there is divergence or not, your points in that chart are not drawn from the same.
Yeah I am confuse to what you are trying to say. Care to elaborate?
Riding the order flow
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