Divergence trading discussion

At what settings if there are any and what time frame would you say is the best for divergence trading? Theres macd..rsi..stochastic..different tf's different settings..what would you say works best? It could be reversal or with the trend. Please discuss what you think works. It could be regular or hidden divergence as well.

I think you need to ask yourself why you're looking for divergence in the first place in order to be able to answer that question. Obviously you want some kind of signal that the price of whatever you're trading is going to move in a particular direction in the near future.

With that in mind, what kind of divergence will allow you to predict with some degree of accuracy where and when other traders will decide to hop on board with the new direction, pushing the price (hopefully) in your favour?

For me, the answer to that question is simply confluence. I will almost never enter a position based on a single signal, and to be honest I don't even use technical indicators at all anymore. If you see divergence in the MACD, that's great. Use that information to add to your overall concept about the price and whether it's offering you good value at that moment in time. But don't enter a trade just based on the divergence.

Personally I don't like changing settings of indicators such as stochs or the RSI to anything but the default simply because the standard settings are what most traders use. The idea of those indicators is that they have a self-fulfilling purpose, ie. when the RSI is considered overbought there will be a greater tendency for more people to enter the market with short positions and less for people to enter long ones. Obviously this is a grossly simplified idea of how to use those indicators but you get the idea.

TLDR: use default settings and don't just use the divergence to enter the market, pair that information up with your existing ideas about the market price.

Mike