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Hidden divergence

  • #561
  • Jun 2, 2016 7:11am Jun 2, 2016 7:11am
I see bullish divergence on hourly usdjpy on both macd and stoch 5.3.3
  • #562
  • Jun 2, 2016 7:43am Jun 2, 2016 7:43am
Quoting Trendzalore
I see bullish divergence on hourly usdjpy on both macd and stoch 5.3.3
hello
i prefer stoch 8 3 3 and OSMA 8 12 9
  • #563
  • Jun 2, 2016 7:56am Jun 2, 2016 7:56am
Quoting dany78
{quote} hello i prefer stoch 8 3 3 and OSMA 8 12 9
Have not tried those settings. Why do you prefer??

Looks like the divergence did not play out for. I did not enter trade because trendline didnt break.
  • #564
  • Jun 2, 2016 8:53pm Jun 2, 2016 8:53pm
USD/JPY H1

New structure low, forming lower high. Connecting the highs and waiting to test structure.

Thanks

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"The markets can remain irrational longer than you can remain solv
  • #565
  • Edited 11:53pm Jun 2, 2016 11:29pm | Edited 11:53pm
Quoting shyean
EUR/USD H4 Hidden Divergence near resistance. Hi chamane, Do you see the same? Thanks {image}
Sorry for late reply. This is not what I look for, but it does not mean you can't be successful with it. I first look for a clear trend. In the case you are showing, there is a double top and a higher low. I would find it more interesting if there was a lower high and a lower low in price matching the hidden divergence (higher high) of the indicator.

Here is what I mean by a clear trend.

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Take away all indicators and you will be left with lower highs and lower lows. There are enough pairs or financial instruments out there and enough timeframes to find an ideal situation almost all the time. This is cherry picked because the trades would have been successful, but it is only to show the clear trend. The main force of hidden divergence in comparison with regular divergence is its move in direction of the trend.
  • #566
  • Jun 3, 2016 1:19am Jun 3, 2016 1:19am
Hi chamane,

Thanks for the explanation.

Quoting chamane
{quote} Sorry for late reply. This is not what I look for, but it does not mean you can't be successful with it. I first look for a clear trend. In the case you are showing, there is a double top and a higher low. I would find it more interesting if there was a lower high and a lower low in price matching the hidden divergence (higher high) of the indicator. Here is what I mean by a clear trend. {image} Take away all indicators and you will be left with lower highs and lower lows. There are enough pairs or financial instruments out there and enough...
"The markets can remain irrational longer than you can remain solv
  • #567
  • Jun 3, 2016 3:25pm Jun 3, 2016 3:25pm
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Time to bring stop loss to breakeven.
  • #568
  • Jun 3, 2016 3:57pm Jun 3, 2016 3:57pm
I decided to cash in a RR of 1:1,10.

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  • #569
  • Jun 3, 2016 8:17pm Jun 3, 2016 8:17pm
Here are what I consider true trade opportunities with hidden divergence on 4 HR timeframes for the past week.

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I personally prefer the ones with clear trends, HD patterns on two oscillators and the ones where price crosses the Ichimoku and price trendlines. I took a few of them all with success, using a RR 1:1. Money management is up to the trader. I will refer to post #555 for the criteria I use. Any comments welcome. GBPUSD hasn't met the trigger criteria yet, but is almost getting there. Will have to keep a close eye on it at the sart of next week.

Thanks to Dany for initiating the thread.
  • #570
  • Jun 6, 2016 12:12pm Jun 6, 2016 12:12pm
Here are opportnities developing. Price has to cross trendlines.

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  • #571
  • Jun 6, 2016 4:32pm Jun 6, 2016 4:32pm
This pair is also worth watching for a move downwards across the price trendline.

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  • #572
  • Jun 6, 2016 4:43pm Jun 6, 2016 4:43pm
Quoting chamane
This pair is also worth watching for a move downwards across the price trendline. {image}
Hello chamane,
And EJ, AJ, GJ, EU.
Thanks for your help, warmth and straight talking Heather.
  • #573
  • Jun 6, 2016 4:55pm Jun 6, 2016 4:55pm
Quoting Kanderpro
{quote} Hello chamane, And EJ, AJ, GJ, EU.
Yes on 4HR charts for the first three ones and on the daily for EU although I find the HD pattern not as clear on the latter. Still shows a sideways behaviour.
  • #574
  • Jun 6, 2016 5:05pm Jun 6, 2016 5:05pm
Here is a shorter term opportunity if price crosses Tenkan.

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  • #575
  • Jun 6, 2016 9:04pm Jun 6, 2016 9:04pm
Got stopped out with a small loss. Price went as far as the risk, but the spread triggered my entry too late and reteruned against me. That's why I prefer trading 4HR TF up. If I ever trade 15 min again, I won't go with pairs having over 3 pip spread.

Also, I might add that there was a regular divergence (red line) just before the hidden pattern meaning a possible change of the trend. This is something I will watch more often in the future. Could be another criteria to add to the toolbox.

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  • #576
  • Jun 7, 2016 1:19am Jun 7, 2016 1:19am
Quoting chamane
{quote} Yes on 4HR charts for the first three ones and on the daily for EU although I find the HD pattern not as clear on the latter. Still shows a sideways behaviour.
I don't know if this HD on EU H4 breaks your rules.
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Thanks for your help, warmth and straight talking Heather.
  • #577
  • Edited 7:57am Jun 7, 2016 7:41am | Edited 7:57am
Quoting Kanderpro
{quote} I don't know if this HD on EU H4 breaks your rules. {image}
Hi,
I prefer when there is no noise between peaks or bottoms. When there are some like in your example, I switch to a higher timeframe (see picture) where I usually get a clear pattern.

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Have a look at Elder's definition of divergence (link below, page 36). He uses two peaks above the zero line (a and c) separated by a bottom under the zero line (b) (for MACD) or two bottoms below the zero line (a and c) separated by a peak above the zero line (b).

https://stockcharts.com/step-by-step-trading.pdf

The example is for a regular divergence pattern, but I apply the same principle for a hidden divergence pattern. As much as I can.
  • #578
  • Jun 7, 2016 8:19am Jun 7, 2016 8:19am
Missed a good entry after the cross of Tenkan.

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  • #579
  • Jun 7, 2016 8:23am Jun 7, 2016 8:23am
This looks like a good entry, but the long wick is nowhere between Fib levels and the spread I get is 14 pips. I will pass.

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  • #580
  • Jun 7, 2016 9:08am Jun 7, 2016 9:08am
I jumped in. All my criteria are not met, but there is a nice evening star candle pattern.

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