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EASY H1 trading using divergence and candle sticks

  • #1,261
  • Aug 20, 2012 6:16am Aug 20, 2012 6:16am
Quoting heispark
It was EURUSD and it turned out a failure...

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Maybe because the oscillator was not indicating an oversold or overbought condition.

What do you think?
  • #1,262
  • Aug 20, 2012 6:28am Aug 20, 2012 6:28am
Quoting alexmackel
Maybe because the oscillator was not indicating an oversold or overbought condition.

What do you think?
I generally agree with you. Thanks.
Simplicity is the ultimate sophistication - Leonardo da Vinci
  • #1,263
  • Aug 21, 2012 10:07am Aug 21, 2012 10:07am
Divergence?

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Simplicity is the ultimate sophistication - Leonardo da Vinci
  • #1,264
  • Aug 21, 2012 12:38pm Aug 21, 2012 12:38pm
Hi

the strategy discussed is simple and effective..
would like to share here one of most recent example USD-CHF

thanks for the post.

regards
rocky
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rocky1980
  • #1,265
  • Aug 21, 2012 1:17pm Aug 21, 2012 1:17pm
Dude this is one of the two strategies I trade. I have an 80% win rate using this. It requries patience but it works. Glad to see you started this thread.

Quoting PurePrice
This system does not use any indicators except for the RSI as an oscillator. The RSI is used as a divergence "leading" indicator to "predict" possible price reversal point. In additon we will also look for a candle stick reversal pattern to solidify our decision. To make things more concrete, we will also look to see these reversal levels are occuring at a logical reactionary price levels, making our odds at winning the trade that much better.

I am not sure if someone else has already covered this way of trading in another thread, but if not...
  • #1,266
  • Aug 21, 2012 1:27pm Aug 21, 2012 1:27pm
I have a possible setup forming here on USDCAD but I'll have to wait on it to confirm. My only concern is that this pair has been moving down already and may not have much more room left to go down but we'll see. Looking for a bearish pin-bar to confirm some reverse divergence here.
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  • #1,267
  • Aug 21, 2012 1:48pm Aug 21, 2012 1:48pm
Quoting jdcompute
I have a possible setup forming here on USDCAD but I'll have to wait on it to confirm. My only concern is that this pair has been moving down already and may not have much more room left to go down but we'll see. Looking for a bearish pin-bar to confirm some reverse divergence here.

Thanks for posting this setup jd. This might be a good setup because USDCAD is just touching the upper boundary of the falling channel and possibly at the same time hit 0.99000 round number (very close to it), in addition to being overbought and having hidden divergence. A winning combo to me, but we still need to get a confirming candle stick pattern to go short but it is getting to the end of the day here in NY and things might be very slow now.
  • #1,268
  • Aug 21, 2012 1:52pm Aug 21, 2012 1:52pm
Check out the nice pinbar at 1.5800 along with bearish divergence and an extremely overbought RSI.
  • #1,269
  • Aug 21, 2012 3:34pm Aug 21, 2012 3:34pm
Quoting PurePrice
Thanks for posting this setup jd. This might be a good setup because USDCAD is just touching the upper boundary of the falling channel and possibly at the same time hit 0.99000 round number (very close to it), in addition to being overbought and having hidden divergence. A winning combo to me, but we still need to get a confirming candle stick pattern to go short but it is getting to the end of the day here in NY and things might be very slow now.
The lateness of the day is also a concern of mine.
  • #1,270
  • Aug 22, 2012 7:39am Aug 22, 2012 7:39am
Hi there,

Just wanted to say I've been stalking this thread for a few months now, and demo trading this method, and have had some small success with it.

But even more than that, it's helped me understand the momentum of the market a lot better, so I'm always watching out for stalks and indicator divergence no matter what other method I'm trying.

Great stuff, thanks!
  • #1,271
  • Aug 24, 2012 9:00am Aug 24, 2012 9:00am
Quoting jdcompute
The lateness of the day is also a concern of mine.
I took a -12 pip loss on the usdcad trade but I more than made up for it on this eurusd counter-trend short trade. Closed this one out at the support line for a +37 pip profit.
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  • #1,272
  • Edited 10:17am Aug 24, 2012 9:04am | Edited 10:17am
Now I'm back in on the same pair but on a trend trade with hidden divergence. I entered on the break of the inside bar with a stop-loss just below the low of the red candle before the inside-bar.

**UPDATE: Just closed this one for a +39 pip profit. It's Friday and the market gets crazy around this time so I'm taking my money and running :-) "Gotta know when to walk away, no when to run" in the words of our good friend Kenny!
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  • #1,273
  • Aug 24, 2012 9:17am Aug 24, 2012 9:17am
Quoting jdcompute
Now I'm back in on the same pair but on a trend trade with hidden divergence. I entered on the break of the inside bar with a stop-loss just below the low of the red candle before the inside-bar.
I also agree eur buy.
Simplicity is the ultimate sophistication - Leonardo da Vinci
  • #1,274
  • Aug 24, 2012 10:44am Aug 24, 2012 10:44am
Quoting heispark
I also agree eur buy.
Yeah, I nailed this one.
  • #1,275
  • Aug 24, 2012 11:03am Aug 24, 2012 11:03am
Quoting PurePrice
For short setup:
1- We look for the price to form a pinbar or bearish englufing candle stick pattern.
2- We now look at RSI(7) of the price close to see if there is divergence between it and the price. i.e the price has made a higher high but the RSI either stayed level or made a lower high.
3- Look to see that the RSI has gone above the 70 level where the first point of divergence is drawn.
4- now, zoom out a bit and look to see the level where all this is occuring. Is it around a round number, or previous support/resistance level? Is it...
Why should use RSI 7, what is the reason? if you use the default RSI 14 what happens
  • #1,276
  • Aug 28, 2012 5:55am Aug 28, 2012 5:55am
Quoting chanx
Hello... Traders and my friends.. Does divergence work in 15M TF?
Ive found that trading divergence on 15 min doesnt really produce a long swing, but rather is the starting point for divergences that may be setting up on 1hr and 4 hr charts. Take 15 min divergences to points of resistance/support, then expect further pushes in the origional direction of the trend which in turn sets up divergences on 1hr, and then again on 4hr... obviously this takes a lot of trade management but can be profitable.

Keep watch on each set up and manage the trades if you have the time, obviously as people have said, stick to 1hrs if you dont have the time to sit and manage each trade.
  • #1,277
  • Aug 28, 2012 11:21pm Aug 28, 2012 11:21pm
This is a little more spread out than I normally like to see but divergence is in play so I took this trade. Up +3 so far.
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  • #1,278
  • Aug 29, 2012 10:24am Aug 29, 2012 10:24am
Quoting jdcompute
This is a little more spread out than I normally like to see but divergence is in play so I took this trade. Up +3 so far.
**UPDATE: Took in +35 on this trade.
  • #1,279
  • Aug 31, 2012 9:40am Aug 31, 2012 9:40am
This one ran for over 10hrs before it finally took off and went into profit. Max drawdown on this trade was -5 pips. You gotta love those trades.
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  • #1,280
  • Aug 31, 2012 10:17am Aug 31, 2012 10:17am
Quoting PurePrice
of NZDUSD H1 chart

Anyone with a dashboard for this system to monitor many pairs.

Thanks
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