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Learning How to Spot the Correct Divergence... Beginner Inside

  • #81
  • Sep 19, 2013 7:18am Sep 19, 2013 7:18am
Quoting aalaoni
I am sure you will love this attachment. Print it out and put it on your desk {image}

Thanks dude
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  • #82
  • Sep 19, 2013 7:20am Sep 19, 2013 7:20am
Quoting XharpScalper
{quote} thats good.

but right now I'm focusing more on understanding price action. which is really hard to understand for me
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  • #83
  • Sep 19, 2013 7:32am Sep 19, 2013 7:32am
Quoting Muhammad Ezz
{quote} try it on a higher time frame maybe!
If the price doesn't go any lower than the low already today then there will definitely be a bullish divergence on the daily. GBP is supposed to be strong at the moment, just got knocked a bit off track by yesterday's news. It normally takes a day or so to get it's mojo back
  • #84
  • Sep 19, 2013 7:35am Sep 19, 2013 7:35am
Talking about GBPCHF, in case anyone is lost
  • #85
  • Sep 19, 2013 7:35am Sep 19, 2013 7:35am
Quoting jen101
{quote} If the price doesn't go any lower than the low already today then there will definitely be a bullish divergence on the daily. GBP is supposed to be strong at the moment, just got knocked a bit off track by yesterday's news. It normally takes a day or so to get it's mojo back

I didn't know that currencies have mojos too like us ....
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  • #86
  • Sep 19, 2013 7:36am Sep 19, 2013 7:36am
They're schizo and neurotic like us too
  • #87
  • Sep 19, 2013 7:42am Sep 19, 2013 7:42am
Quoting jen101
They're schizo and neurotic like us too
ROFL
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  • #88
  • Sep 19, 2013 11:02am Sep 19, 2013 11:02am
Quoting jen101
{quote} I applied CCI(7) to GBPCHF H4 and there are no divergences at the moment, maybe bullish one forming if the price stalls. I don't know which is the best indicator or length to use, but I have in the past found CCI(7) to be useful, so it's sort of stuck. I'd be wary of shorting that for now, because if you look on the daily, it may bounce back up on the 23.6 fib.
hi jen101.
macd and rsi is the best for this.divergence is not a trading system alone
its a tool for reduce ur loses.
THERE IS NO SYSTEM
  • #89
  • Sep 19, 2013 11:43am Sep 19, 2013 11:43am
What you really need to do is look at ONE timeframe only if you are trading divergence. the 1H will differ greatly from the 4H and daily, etc. Stick to one TF and one generous indicator setting. And never rely on divergence alone. It is only portending a slowing of momentum, that's all. There's nothing magical about it, and it absolutely does NOT mean the market is going to turn immediately.
There's always money in the banana stand.
  • #90
  • Sep 19, 2013 3:54pm Sep 19, 2013 3:54pm
Quoting LizardGizzard
What you really need to do is look at ONE timeframe only if you are trading divergence. the 1H will differ greatly from the 4H and daily, etc. Stick to one TF and one generous indicator setting. And never rely on divergence alone. It is only portending a slowing of momentum, that's all. There's nothing magical about it, and it absolutely does NOT mean the market is going to turn immediately.

What about relying on it + waiting for a conformation bar ?
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  • #91
  • Sep 19, 2013 4:10pm Sep 19, 2013 4:10pm
Yeah, I think using divergence as a precursor to entry from another method such as S/R and trend breaks is the way to go. I think of it basically as a warning light....a fairly effective one at that.
There's always money in the banana stand.
  • #92
  • Sep 19, 2013 4:18pm Sep 19, 2013 4:18pm
Quoting LizardGizzard
Yeah, I think using divergence as a precursor to entry from another method such as S/R and trend breaks is the way to go. I think of it basically as a warning light....a fairly effective one at that.
Roger That
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  • #93
  • Sep 20, 2013 7:47am Sep 20, 2013 7:47am
I know that RSI and Stochs and MACD are the traditional ways to see divergence and I used these too. However, I really like this indicator for divergence. It is a BH-Ergodic. I have two of them on the chart, one short term and one long term. You can see from this example on the USDJPY this morning how clear it is. It is especially good when the divergence occurs with a crossing of the short term and long term. I found it on the daytrading/scalping thread started by DNA.
Attached Image (click to enlarge)
Click to Enlarge Name: usdjpym1.png Size: 60 KB
Attached File(s)
File Type: mq4 BH-Ergodic.mq4   6 KB | 288 downloads
Lord, Liar, Lunatic. Those are only 3 options to Christ's diety claim.
  • #94
  • Sep 20, 2013 8:02am Sep 20, 2013 8:02am
Quoting capstone
I know that RSI and Stochs and MACD are the traditional ways to see divergence and I used these too. However, I really like this indicator for divergence. It is a BH-Ergodic. I have two of them on the chart, one short term and one long term. You can see from this example on the USDJPY this morning how clear it is. It is especially good when the divergence occurs with a crossing of the short term and long term. I found it on the daytrading/scalping thread started by DNA. {image} {file}
Thanks for the hint man I'll take a look at it once I have a chance
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  • #95
  • Sep 20, 2013 8:02am Sep 20, 2013 8:02am
Quoting capstone
I know that RSI and Stochs and MACD are the traditional ways to see divergence and I used these too. However, I really like this indicator for divergence. It is a BH-Ergodic. I have two of them on the chart, one short term and one long term. You can see from this example on the USDJPY this morning how clear it is. It is especially good when the divergence occurs with a crossing of the short term and long term. I found it on the daytrading/scalping thread started by DNA. {image} {file}
BH-Ergodic - I've never heard of it! Do you use the short term one for divergences? Gosh, that looks interesting.
  • #96
  • Sep 20, 2013 11:19am Sep 20, 2013 11:19am
Quoting jen101
{quote} BH-Ergodic - I've never heard of it! Do you use the short term one for divergences? Gosh, that looks interesting.
Yes, I look at the short one for the divergences. They are particular helpful when crossing through the long however, as seen in the example. The 0 and 70 and -70 lines are based on the short one. The short and long lines will move in relation to each other over time. This does not matter to me however, as I am trading what I see now, and using this a signal, not a stop and go light.

The set up on the short is 2,10,5 and on the long it is 10,50,25. Have fun!
Lord, Liar, Lunatic. Those are only 3 options to Christ's diety claim.
  • #97
  • Sep 20, 2013 11:41am Sep 20, 2013 11:41am
Here it is again. This happens to top out at the same spot it did in the earlier chart. These are M1 charts by the way.
Attached Image (click to enlarge)
Click to Enlarge Name: usdjpym1.png Size: 61 KB
Lord, Liar, Lunatic. Those are only 3 options to Christ's diety claim.
  • #98
  • Sep 20, 2013 2:06pm Sep 20, 2013 2:06pm
Thanks capstone. Would you say it was more reliable / accurate than the others (MACD, RSI, CCI)?
  • #99
  • Sep 20, 2013 3:03pm Sep 20, 2013 3:03pm
Has anyone considered this for long term trades? I think the weekly timeframe could prove quite accurate.
Attached Image (click to enlarge)
Click to Enlarge Name: gbpaud.PNG Size: 56 KB
  • #100
  • Sep 20, 2013 3:06pm Sep 20, 2013 3:06pm
The trouble there, Jen, is that the price action could take months and months to play out.
There's always money in the banana stand.
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