a simple divergence system

[TAjammy]

i have created my own little system, probably widely used already. Using 20 MA, 50 MA, MACD histogram and some basic support and resistance, most trades (demo on MT4) around 70-80% are correct!

il explain with this chart, sorry these link dont show images for me so you'll have to click on the link:http://chart.ly/assets/qev5sc.JPG

basically, the divergence is only a signal that a reversal is on its way, once the signal is off, all you have to do is wait for an important supprot/resistance level to crack - along with price piercing above or below both MAs, then is a good time to enter. Simple, quick and reliable. Of course sometimes there isn't a reversal, some trends are just too strong

 

[N Rothschild]

how much chop could wood chop chop if a wood chop could chop wood chop chop


choppy days will KILL this system, and any event driven days..sorry to put a damper on you but you'd be better looking into something else

 

[TAjammy]

it usually works better on daily charts anyway so intraday activites won't hugely affect it. However if the general market is choppy then yeh im fu****! dunno what other strategies to look into....i play support/resistance easy sometimes.

edit- another recent divergence play-http://chart.ly/d3spe2

edi: i avoid forex news days anyway, pluuus i trade stocks and futres aswell

 

[N Rothschild]

whats the exit strategy? getting in is the easy bit..

 

[TAjammy]

first candle outside 50 MA, or maybe 20MA depending on where the MAs are

for example http://chart.ly/d3spe2 you can see that the first candle to land outside the 50 MA was waaay down, a good 30 pip move.

o i forgot to mention i only buy or sell whenever price is above or below both MAs, as well as breaking out/down

 

[rathcoole_exile]

it doesn't matter how successful this method proves to be; I confidently predict that you will either
a) drop it the first time it loses serious bucks
b) drift away from it out of boredom and start looking at other things
c) tweak, modify and "improve" it beyond recognition .....

 

[rathcoole_exile]

(by the way, I'd be more than happy to see you prove me wrong )

 

[TAjammy]

haha, well using divergence i just sold some EURJPY at 134.266, look at her now!

 

[rathcoole_exile]

I'm not for one minute doubting the effectiveness of your method.
It could well be the Holy Grail for I all know.

The point I was teasing you about is whether you can stick with it ........

something a lot of people seem to have great difficulties with, for any one of the 3 reasons (maybe more) mentioned above ...... I hope you prove to be different .....

 

[TAjammy]

haha, just entered another trade!

i take no offense anyway, i have bellief in this system, i have seen it fail so i wont be surprised if it doesnt work the odd time!- oh sh** lol that trade didnt go well!

 

[TAjammy]

hey, you northern irish?

 

[rathcoole_exile]

I surely am

 

[TAjammy]

so am i!

 

[rathcoole_exile]

one of us or one of them ?

 

[TAjammy]

lol, us of course. wherabouts?