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EASY H1 trading using divergence and candle sticks

  • #841
  • May 9, 2012 5:33am May 9, 2012 5:33am
Quoting don555
Why is your rsi setting at 6 and not seven.
No reason really. Thanks Julie for that post. Continuing div is something new to me.

Anyway we may get something in USDCAD again.
Riding the order flow
  • #842
  • May 9, 2012 5:36am May 9, 2012 5:36am
excellent summary julie. thanks a lot
  • #843
  • May 9, 2012 5:40am May 9, 2012 5:40am
Quoting Binyamin
No reason really. Thanks Julie for that post. Continuing div is something new to me.

Anyway we may get something in USDCAD again.
At times although not all the time 1pt in the rsi makes a difference to either being or not being divergence.
  • #844
  • May 9, 2012 5:43am May 9, 2012 5:43am
hi traders,

looks like a divergence trade may setup in usdchf. Did not setup yet, but i think it is worth keeping track of it. This may also fill the gap. We will see.
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  • #845
  • May 9, 2012 5:57am May 9, 2012 5:57am
Quoting julie1585
Also there is a lot of "debate" about using wicks or close, I understand the principal of using close but I find the wicks easier to draw and see and trade. If the divergence is not clear and I am unsure I may draw the close to check but most often the divergence is there with either close or wicks, it just changes the angle. Personal preference seems the way to go with this
If people are having problem finding and drawing the divergence to the close of the candle it may help to add a MA1 apply to close and connect the lines to the peaks of the MA.

Anyway this is not how this system is traded. PurePrice use the highs and lows of the candles.

Arctic4x
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  • #846
  • May 9, 2012 6:15am May 9, 2012 6:15am
Quoting julie1585
Hi all,

I did this little pic to help clarify divergences....

Regards,
Julie

Julie, Could you tell me what type of MACD indi did you used in your last post ? Is it a standard MT4 indicator? I have identical parameters (12,26,9), but my MACD histogram looks completely different (maybe it's due to time zone of my broker)
  • #847
  • May 9, 2012 6:24am May 9, 2012 6:24am
What is the definition of an engulfing candle.
Do we just take in body of the previous candle or do we take in the wicks as well.
  • #848
  • May 9, 2012 6:31am May 9, 2012 6:31am
nothing developed yet, but keep an eye on those yen pairs for a setup later on. Seems like the yen is very strong against everythign else, but maybe we will a chance to trade it if it slows down a bit.
  • #849
  • May 9, 2012 6:31am May 9, 2012 6:31am
Quoting don555
What is the definition of an engulfing candle.
Do we just take in body of the previous candle or do we take in the wicks as well.
Only the body of the previous candle needs to be engulfed by the following candle
  • #850
  • May 9, 2012 6:33am May 9, 2012 6:33am
For contributing to the thread and bringing in fresh new ideas for traders to consider. Keep up the good work
  • #851
  • May 9, 2012 8:01am May 9, 2012 8:01am
With the setup failure of USDJPY and USDCAD today, I am break even in my demo account. The USD seems to be gaining strength from the EURO crises. Looks like this is going to be a trend from now.
Riding the order flow
  • #852
  • May 9, 2012 8:02am May 9, 2012 8:02am
Great post Julie

here you can read more about divergences

http://www.trading-naked.com/Divergence.htm

regards
  • #853
  • May 9, 2012 8:44am May 9, 2012 8:44am
Hi,

It looks like Eurusd, Aud usd may form a divergence. RSI staying flat, while price made lower lows.

comments welcome, and if it works, good for everyone.

thanks
  • #854
  • May 9, 2012 8:49am May 9, 2012 8:49am
nice thread
  • #855
  • May 9, 2012 9:27am May 9, 2012 9:27am
Quoting whydak
Julie, Could you tell me what type of MACD indi did you used in your last post ? Is it a standard MT4 indicator? I have identical parameters (12,26,9), but my MACD histogram looks completely different (maybe it's due to time zone of my broker)

Hi Whydak,

sorry about that I used the MACD the guy i am learning from provided. I personally don't use MACD as I don't find it easy to pick div, the peaks in RSI stand out more to me. I was just trying to show there are multiple versions of divergence.

Anyway i did a little research on this isssue and came up with this thread

http://www.forexfactory.com/showthread.php?t=69409

which the techies discuss the various pros and cons of MT4 macd and an indicator called MACD True, and there is a version with an alert, Macd ColorHist. It is very similar to the indi I got from my commercial forex guy.

http://www.forexfactory.com/attachme...8&d=1202622135

http://www.forexfactory.com/attachme...02008%203:05am

quote from the thread from a guy that seems to know he is talking about:

"Keep in mind, the blue MA line on the true MACD is exactly the same as the green histogram on the default MACD. When the red & blue MAs cross on the true MACD, it's equivalent to the red MA line crossing the green histogram on the default MACD. There is no lag time with respect to crosses between both indicators, they are identically timed.

This difference comes into play when you compare just histograms - one represents an MA line (incorrect), whereas the other correctly represents the difference between MA lines. This is especially important if one trades MACD histogram divergences (high probability setups)."

I wasn't intending to pollute this thread with MACD stuff so if you want to know more about macd divergence trading please do your own searches. PP uses RSI and I can see why.

Regards,
Julie
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  • #856
  • Edited 11:25am May 9, 2012 11:06am | Edited 11:25am
Hi, Have just finished reading your great thread. I currently have 8 trades on the go all taken useing your Div with RSI and MACD.
Coletive an + 100 pips at the moment have three pairs locked in to BE plus spread others are slow but moveing in right direction

EURUSD,AUDUSD,GBPJPY,EURJPY,GBPUSD,USDCAD,USDJPYAUDJPY.

Happy pip hunting.

PS Here are some screen shots of my trades tonight /It is night I'm in Australia infact it is 02.20am.
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Mr pips your coming with me
  • #857
  • May 9, 2012 11:58am May 9, 2012 11:58am
good to hear that you colecting pips with this strategy fxprobe

here are my results for today

USD/CAD: +20
EUR/JPY: +15
GBP/USD: +26
EUR/USD: +20 will not post picture it may confuse you

Overall score +81 pips

TIP:look divergences on 5 min to confirm your entry+earlier entry

regards
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  • #858
  • May 9, 2012 12:53pm May 9, 2012 12:53pm
at the falling trendline now and making a lower high, while RSI is making a higher high, thereby creating hidden divergence (for now). This is an area to watch for a "potential" short setup maybe
  • #859
  • May 9, 2012 1:15pm May 9, 2012 1:15pm
Quoting PurePrice
at the falling trendline now and making a lower high, while RSI is making a higher high, thereby creating hidden divergence (for now). This is an area to watch for a "potential" short setup maybe
Hi,
Thank you for this thread and everyone actively contributing.

PP, I want to ask you whether you consider context of other time-frames, whether Lower to find finer entry off H1 charts or higher tf to validate entry on H1.

For instance I see that Cable on H4 has bullish divergence, although not sure what its upside potential is. Nevertheless, worth noting when taking a short entry into consideration?

Thank you, livindaylite
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  • #860
  • May 9, 2012 8:40pm May 9, 2012 8:40pm
Hi to all I am still in my AUDUSD trade from lastnight Aus employment figers just come out trade has go from just in profit to locked in 21pips profit
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Mr pips your coming with me
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