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EASY H1 trading using divergence and candle sticks

  • #1,361
  • Oct 9, 2015 12:14pm Oct 9, 2015 12:14pm
Trade I took based off of multiple reasons. Price came back and tested support for the first time, inside candlestick printed, and hidden bullish divergence printed all at the same time!

Attached Image (click to enlarge)
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  • #1,362
  • Oct 9, 2015 12:28pm Oct 9, 2015 12:28pm
Quoting piptime
Trade I took based off of multiple reasons. Price came back and tested support for the first time, inside candlestick printed, and hidden bullish divergence printed all at the same time! {image}
Guys this is the importance of confluence. When you have multiple reasons like above to enter a trade you greatly increase the probability of success. I do not trade every divergence setup..you will lose more then you will win if you do. I trade divergence that has confluence, multiple reasons to enter the trade. Every trade you take should have more than one reason to enter the trade, I like more than two just like the above picture.
  • #1,363
  • Oct 9, 2015 1:02pm Oct 9, 2015 1:02pm
Hey piptime,
great how this old thread about div is going on, don t you think.

You are absolutely right with all you say about more than one reason to take a trade.
We can not blindly jump on every div a indi is showing.
  • #1,364
  • Edited 2:03pm Oct 9, 2015 1:09pm | Edited 2:03pm
.... I know about a veteran trader who learned a lot from his father, a trader also.
He says, look for the five "forces" which will bring you the most possible success.

TREND, MOMENTUM, S+R levels, Fractals (meant is MTF) check by looking for example in the M15 if a early entry in H1 is developing and the last force is....can`t remember, have to search....maybe whisky for get the balls to get in the trade or something...
I will check his name, some pics and all 5 forces for you
  • #1,365
  • Oct 9, 2015 1:21pm Oct 9, 2015 1:21pm
Nice example with actual trades when

three reasons come together. H4 Channel-touch, importand support D1 and the two div indis.

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  • #1,366
  • Oct 9, 2015 2:24pm Oct 9, 2015 2:24pm
....by the way momentum...

With the T3 CCI we have a nice momentum indi too.

You know, crossing -100 or 0 or 100 are important momentum....moments so to speak.

And a strat in itself are divs above 100 and below -100. Check it out for example in the pic I posted
(last Aqua line with arrow up) below -100 aaand up it goes.

This strategy is normaly shown by the regular cci in MT4 setting is cci 10.
  • #1,367
  • Oct 26, 2015 11:21am Oct 26, 2015 11:21am
Hey all. Here is a nice win I had today. If you take a look at my trade explorer I started this new account trading divergence only the 23rd of September and so far I am up 86%. Divergence is working out nicely so far!
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  • #1,368
  • Oct 27, 2015 11:38pm Oct 27, 2015 11:38pm
Hi Piptime and all. I've been using this method for a while now and i must say it great. The problem I've found is that it gets some awkward trades when going against an established trend. The rules don't say a thing about how to manage those kinda scenarios, so piptime, pureprice, everybody, what do we do in situations like that.
  • #1,369
  • Oct 28, 2015 4:10pm Oct 28, 2015 4:10pm
Quoting Wahnone
Hi Piptime and all. I've been using this method for a while now and i must say it great. The problem I've found is that it gets some awkward trades when going against an established trend. The rules don't say a thing about how to manage those kinda scenarios, so piptime, pureprice, everybody, what do we do in situations like that.
Hi Wahnone,

When deciding to take a trade make sure there are more reasons to take the trade then just divergence. Use divergence as a heads up so to speak. After you see divergence is occurring look for where price is at...is it at a place of interest like support/resistance. If so then great...next how is price reacting to that area...what candlesticks are printing. If a certain candlestick prints that has a high probability of making price reverse...then good! Also know when to get out...I hate being in trades for a long period of time...actually I love when price moves 100-200 pips in my favor and getting out. Im usually in a trade for 1-2 hours at most, especially if the trade is against the overall trend. Learn all those things and it will be really hard for you to lose.
  • #1,370
  • Oct 29, 2015 10:34am Oct 29, 2015 10:34am
Quoting Wahnone
Hi Piptime and all. I've been using this method for a while now and i must say it great. The problem I've found is that it gets some awkward trades when going against an established trend. The rules don't say a thing about how to manage those kinda scenarios, so piptime, pureprice, everybody, what do we do in situations like that.
Wahnone,

Here is a current situation on CAD/JPY. As you can see divergence has printed. I have yet to enter the trade though due to price action. I am patiently waiting for the right candlestick to print before placing my sell. Since there is so much volume to the upside at the moment, once I get into my trade I will be looking for a really quick exit. This has to much upside which means the TP has to be smaller. We will wait and see what price action does to confirm a trade. This is how I approach Divergence.

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  • #1,371
  • Oct 29, 2015 12:28pm Oct 29, 2015 12:28pm
Still no trade presented for us. I imagine price is going continue up to 92.200 area before a small break down. We shall see!

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  • #1,372
  • Oct 30, 2015 10:06am Oct 30, 2015 10:06am
Quoting piptime
Still no trade presented for us. I imagine price is going continue up to 92.200 area before a small break down. We shall see! {image}
Hey guys looks like price did as I thought it would do although the break down was much larger than I anticipated but that's great news for whoever caught this trade!

Attached Image (click to enlarge)
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  • #1,373
  • Oct 30, 2015 10:28am Oct 30, 2015 10:28am
Hey piptime,
nice job.
Found a rsi divergence indi. Good to get alerts, but as you say: we need more good reasons to get into a trade.

Attached File(s)
File Type: mq4 RSI_Divergence_v2.mq4   12 KB | 631 downloads


It is nothing new, but you get your alerts for "heads up" then check S+R, channel, trend, momentum to decide if it is a go.
  • #1,374
  • Oct 30, 2015 10:38am Oct 30, 2015 10:38am
Quoting wolf300
.... I know about a veteran trader who learned a lot from his father, a trader also. He says, look for the five "forces" which will bring you the most possible success. TREND, MOMENTUM, S+R levels, Fractals (meant is MTF) check by looking for example in the M15 if a early entry in H1 is developing and the last force is....can`t remember, have to search....maybe whisky for get the balls to get in the trade or something... I will check his name, some pics and all 5 forces for you
Well as he is a very successful commercial trader/marketing expert, I won`t promote him here.
But he is one of the very rare good guys (Barry B.)

So his trading is always spinning around the 5 forces: Trend (MA 50 exp., close), Momentum (any momentum indi),
S+R levels, Fractals (he is checking the next higher tf) and
Cycles of PA (not sure about that because I did not buy his system/course, but I guess it can be a oscillator like stochastic 5,3,3
  • #1,375
  • Oct 30, 2015 10:40am Oct 30, 2015 10:40am
Hey Wolf,

Yes once I see divergence print then I start looking for more reasons to take the trade. Price action (candlesticks), support resist, trend lines, news (if any is coming or just happened). I am a student and continue pursuing knowledge on trading but if someone asked me what to learn to trade divergence I would suggest learning in this order.

1. Support/ Resist
2. Candlestick Analysis (Price Action)
3. Divergence
4. Money Management

After you have learned those 4 things I would then suggest demoing for a few months for practice.

Attached Image (click to enlarge)
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Here is another divergence example on this pair. This would have been a great trade as well.
  • #1,376
  • Oct 30, 2015 10:48am Oct 30, 2015 10:48am
Piptime,

let us talk a bit about the rsi settings, please.

There are many different settings and nobody knows which one is best.
I use rsi 5, close because 5 periods are a fib-number (fib is important in timing too), 5 is not too quick and not to slow, but the most important part is the levels. I use 15 and 85 as over S and over B. Very good trades are coming from these levels (any tf) and very, very good trades if you get divergences starting from those levels.
  • #1,377
  • Oct 30, 2015 10:49am Oct 30, 2015 10:49am
Quoting drakos
{quote} I do not think that there is divergence yet on this particular chart. You are drawing the lines from the highs of the candles but I believe that the RSI is based on the close of the candles. On the next chart that you posted the divergence did actually occur as the there was a higher close but the RSI kept going down.
Actually there was a higher high. You draw the divergence lines on the candle wicks. The second high was made when price went higher than the previous high. Do you know what divergence is? I have posted a cheat sheet chart on divergence a few weeks ago in this thread. I will post it again so you can learn how to spot divergence.
Attached Image (click to enlarge)
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  • #1,378
  • Oct 30, 2015 11:01am Oct 30, 2015 11:01am
Quoting piptime
Hey Wolf, Yes once I see divergence print then I start looking for more reasons to take the trade. Price action (candlesticks), support resist, trend lines, news (if any is coming or just happened). I am a student and continue pursuing knowledge on trading but if someone asked me what to learn to trade divergence I would suggest learning in this order. 1. Support/ Resist 2. Candlestick Analysis (Price Action) 3. Divergence 4. Money Management After you have learned those 4 things I would then suggest demoing for a few months for practice. {image}...

98% true.
To be realy successful we need the 2% missing. Trading with real money makes this little difference. As you know it is the mental hurdle that keeps us away from the money. Technical a 10 year old boy could check the trades and pull the trigger.
Even if you trade with very small lots, but real money on the table is the best mental training you can get.
  • #1,379
  • Oct 30, 2015 11:04am Oct 30, 2015 11:04am
Quoting wolf300
Piptime, let us talk a bit about the rsi settings, please. There are many different settings and nobody knows which one is best. I use rsi 5, close because 5 periods are a fib-number (fib is important in timing too), 5 is not too quick and not to slow, but the most important part is the levels. I use 15 and 85 as over S and over B. Very good trades are coming from these levels (any tf) and very, very good trades if you get divergences starting from those levels.
Hey Wolf,

I also believe 5 is to fast. I am currently using 10 and have had success with it. In terms of levels I never really thought to trade divergence this way, I know those levels represent overbought/oversold but I like to look at the chart and see where price is at (suppor/resist). Usually when price hits these levels rsi is around 85/15 which adds another reason to take a trade. Wolf thank you for your input, I like to try and learn new things from other traders.
  • #1,380
  • Oct 30, 2015 11:11am Oct 30, 2015 11:11am
Quoting piptime
{quote} Hey Wolf, I also believe 5 is to fast. I am currently using 10 and have had success with it. In terms of levels I never really thought to trade divergence this way, I know those levels represent overbought/oversold but I like to look at the chart and see where price is at (suppor/resist). Usually when price hits these levels rsi is around 85/15 which adds another reason to take a trade. Wolf thank you for your input, I like to try and learn new things from other traders.

....you are welcome.
I am sure this is the only way to learn... input from other traders...different views. That is what makes this platform so valuable.
Another thought about rsi 5 85/15... if you work like barry b. and check the "fractals" in more than one tf and look for touching the levels in M15, M30 and H1, you will find some good trades. Check it out please.
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