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Trading Divergence

  • #1
  • First Post: May 11, 2006 9:01pm May 11, 2006 9:01pm
Hi,

Could any one tell me what metatrader indicators and their settings to use to show divergence in small time frames ie 1min, 5min etc. i think just trading divergence could be the "holy grail". Divergence happens before the move and predicts price.

Divergence trading could work well at small time frames for scalping the markets.

Any help is appreciated.
thanks,
traderandreas
  • #2
  • May 11, 2006 9:17pm May 11, 2006 9:17pm
Hi traderandreas, first of all I assure you divergence isn't the "holy grail", but it can be useful at times. From my experience the RSI is the best divergence tool, standard settings are fine usually (14), otherwise an 11 RSI.
You can quit and they won't care, but you will always know.
  • #3
  • May 11, 2006 9:28pm May 11, 2006 9:28pm
example
Attached Image
  • #4
  • May 11, 2006 9:43pm May 11, 2006 9:43pm
This is it... No really, honest...
Attached Image
  • #5
  • May 11, 2006 10:15pm May 11, 2006 10:15pm
oops that did not sound right. What I mean is you should pay attention to jim's stuff. It is as close as you will get to a Holy Grail.
  • #6
  • May 11, 2006 10:28pm May 11, 2006 10:28pm
Quoting smjones
oops that did not sound right. What I mean is you should pay attention to jim's stuff. It is as close as you will get to a Holy Grail.
LOL, well im glad someone thinks im doing something right because the crazy price action lately has been tough at least for me. i lost 915 today, worst hit ive taken in a while. just participating in this forum has helped my trading immensly. for example this divergence thing. i do it my own way but the bottom line is this. ITS NOT ABOUT HOW MUCH YOU CAN TRADE. you could watch 6 pairs on a daily chart and catch one good divergence/price action trade and you will have your much talked about and coveted 15 pips a day for a month in one trade. the next thing up in the PF is how to combine how i use divergence with price action. dont anyone go crazy that im pushing the PF, i might mention it once a month at most on the public side. i saw the thread and could not resist. remember im addicted to this forum, have been for over a year.
  • #7
  • May 11, 2006 10:32pm May 11, 2006 10:32pm
Hey Jim you are too modest. It was the stuff I learned from your price action section that kept me out of gbpjpy and saved me from being handed my butt..

So I am sorry for your loss , but please with my gain and avoided loss...
Scott

Quoting james16
LOL, well im glad someone thinks im doing something right because the crazy price action lately has been tough at least for me. i lost 915 today, worst hit ive taken in a while. just participating in this forum has helped my trading immensly. for example this divergence thing. i do it my own way but the bottom line is this. ITS NOT ABOUT HOW MUCH YOU CAN TRADE. you could watch 6 pairs on a daily chart and catch one good divergence/price action trade and you will have your much talked about and coveted 15 pips a day for a month in one trade. the next thing up in the PF is how to combine how i use divergence with price action. dont anyone go crazy that im pushing the PF, i might mention it once a month at most on the public side. i saw the thread and could not resist. remember im addicted to this forum, have been for over a year.
  • #8
  • May 11, 2006 10:38pm May 11, 2006 10:38pm
Quoting smjones
Hey Jim you are too modest. It was the stuff I learned from your price action section that kept me out of gbpjpy and saved me from being handed my butt..

So I am sorry for your loss , but please with my gain and avoided loss...
Scott
good job Scott, btw how did you get 600 plus posts in 2 months? thats incredible.
  • #9
  • Edited 10:46pm May 11, 2006 10:41pm | Edited 10:46pm
I am very chatty! And on that note, good night...

LOL

Quoting james16
good job Scott, btw how did you get 600 plus posts in 2 months? thats incredible.
  • #10
  • May 11, 2006 11:03pm May 11, 2006 11:03pm
Quoting smjones
I am very chatty! And on that note, good night...

LOL
yeah me too. on both notes.
  • #11
  • May 11, 2006 11:55pm May 11, 2006 11:55pm
Quoting smjones
This is it... No really, honest...
What have you been smokin jones? (and do yu have any left?)

Kewll logo, What does the ribbon say?
Nolite dormiens pungere ursum. -- Latan Proverb.
  • #12
  • May 12, 2006 1:42am May 12, 2006 1:42am
Quoting traderandreas
Hi,

Could any one tell me what metatrader indicators and their settings to use to show divergence in small time frames ie 1min, 5min etc. i think just trading divergence could be the "holy grail". Divergence happens before the move and predicts price.

Divergence trading could work well at small time frames for scalping the markets.

Any help is appreciated.
thanks,
traderandreas
I watch for divergences in small time frames (5min) but I never trade a divergence solely because it happens. I always take it in context of the current market condition and whether or not the price is at a significant level.
I was here, here I was. Was I here? Yes I was!
  • #13
  • Edited 3:47am May 12, 2006 2:19am | Edited 3:47am
It is a good idea to pay attention to the divergences on the time frame you use for entries (your trigger time frame) !

You can then look at divergences in higher time frames, which might help with your target.

I am trading mainly off 1 min. If it is a pure 1 min entry I aim for 15/20. If there is confirming divergences on 5 min I am for 30. 30 mins I aim for 50/60 and so on. I am using other tools, though divergence (regular and hidden) is up there.

Divergence Link:

http://www.ensignsoftware.com/tips/t...htm#Divergence

(See files attached)
Attached File(s)
File Type: pdf S & C - Reverse Divergences and Momentum by Martin Pring.pdf   808 KB | 1,864 downloads
File Type: pdf S And C Hidden Divergence.pdf   245 KB | 1,472 downloads
  • #14
  • May 12, 2006 2:30am May 12, 2006 2:30am
(Divergence visual attached)
Attached File(s)
File Type: doc Divergence Chart.doc   109 KB | 1,292 downloads
  • #15
  • May 12, 2006 5:55am May 12, 2006 5:55am
I have no idea. I found the image on google... It probably says "Drink more Ovaltine"...

BTW smokin is bad for you, My high comes from good ol natural sleep deprivation. LOL

Scott


Quoting MrWhipple
What have you been smokin jones? (and do yu have any left?)

Kewll logo, What does the ribbon say?
  • #16
  • May 12, 2006 7:28am May 12, 2006 7:28am
traderandreas,

just a thought...maybe considering a "context" filter for taking only those momentum divergence that are going with the higher timframe trend....e.g., say a market is on a downtrend on the dailys...made a new low...and had 3 corrective updays (just blueprint)...in this context one can consider looking for momentum div on the e.g. 15min timeframe to enter on the short side

in generell i found the concept a bit dangerous, cause it forces you to sell new highs (while you should rather go with the flow and buy new highs)

just my eyes..
  • #17
  • May 12, 2006 7:53am May 12, 2006 7:53am
Quoting smjones
I have no idea. I found the image on google... It probably says "Drink more Ovaltine"...

BTW smokin is bad for you, My high comes from good ol natural sleep deprivation. LOL

Scott
Me too. I had to quit smokin when I moved away from Utah. I can't get any cedar bark out here.
Nolite dormiens pungere ursum. -- Latan Proverb.
  • #18
  • May 12, 2006 9:36am May 12, 2006 9:36am
LOL, The Postum is good too... Scott



Quoting MrWhipple
Me too. I had to quit smokin when I moved away from Utah. I can't get any cedar bark out here.
  • #19
  • May 12, 2006 9:56am May 12, 2006 9:56am
Quoting smjones
LOL, The Postum is good too... Scott
"If you don't have time for a cup of Postum, you better plan your day a little better." - my ole ZL -
Nolite dormiens pungere ursum. -- Latan Proverb.
  • #20
  • May 12, 2006 10:01am May 12, 2006 10:01am

Quoting MrWhipple
"If you don't have time for a cup of Postum, you better plan your day a little better." - my ole ZL -
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