Essential elements in tech analysis discussion

[TWI]

RSI divergence is always a good reversal indicator with a far better than 50% probability. Of course, as with anything need to get the entry, exit and bet size sorted to account for timne frame you are working on.

 

[bbmac]

Hi devilbis

I find that certain patterns of oscillator divergence and indeed oscillator extremes can pinpoint swing points, be them minor or major. Of course on a trending day oscillators will diverge as momentum decreases and this can be useful at identifiable support/resistance. In terms of trend hidden/reverse divergence used in conjunction with the phenomenon of supp becomes res and res becomes supp can be useful too.

The link is a description of the types of divergence patterns I look for:
http://www.trade2win.com/boards/showthread.php?p=362564#post362564

These with channel/band deviation form the technical patterns (set-ups) that i look for at identifibale areas of potential support/resistance/sbr/rbs, so for me I find them extremely useful. Divergence is the only way i know to turn a lagging indicator into a potentially leading indicator.

 

[bbmac]

The screenshots attached show the 1min and 5min chart of gbpusd today at the base of this 0300-0320 support zone. notice the bullish divergence in the oscillators.

The reversal patterns i look for need to have reg immed/seq seperate peak/valley osma divergence and reg immed same/seperate peak macd divergence. You will see here that both the 1min (my trigger) and the 5min (my intermediate time frame) confirmed an entry at support. The bol bannds add to the configuaration to produce the xact set-ups. (In this case a 1min Reversal C with 5min Reversal A(ii) confirm.) Incidentally the 15min divergence and bols pattern confirmed and with double reg immed div on 5min it made it a stronger pattern at support

 

[bbmac]

sorry screenshots here:

 

[bbmac]

The screenshot below shows the 15min divergence pattern to support that 1 and 5min above. At time of entry price was 139pips down from daily high so above the 5 and 10day pip range averages and near the 20day 145 average so due a decent correction in the downtrend.

The Reversal B on the 15min is as follows:

'.....10 bol (aqua) comes inside 20 (white) and 40 (pink) at which time there will be sperate peak/valley reg immed/seq osma div with same/seperate peak/valley reg immed macd div at an identifiable point of supp/res. Very often the osma divergence is above/below the axis. '

My point is that divergence can help to identify swing points at supp/res/sbr/rbs if firstly you can identify support/resistance and secondly, you can identify high probability repeatable patterns of divergence in your chosen oscillators/settings.

 

[fibonelli]

I'm currently looking at past setups in GBP/USD as empirical evidence.

The same setup for the decline was seen on the 30min.

Observations:
Slightly declining trend - see light grey shading.
11420 chart support becoming resistance (SBR!) - see orange shading
Breakdown first tested the (very tight) lower BB.
Breakdown then tested the pivots (OHLC, HLC) (but price met resistance at 20420) - see purple shading.
SMI's pre-decline were in a mix!
SMI's on the failed test of 20420 gave bear divergence signals on two (timeframe) settings.

 

[black bear]

Hi devilbis

I find that certain patterns of oscillator divergence and indeed oscillator extremes can pinpoint swing points, be them minor or major. Of course on a trending day oscillators will diverge as momentum decreases and this can be useful at identifiable support/resistance. In terms of trend hidden/reverse divergence used in conjunction with the phenomenon of supp becomes res and res becomes supp can be useful too.

The link is a description of the types of divergence patterns I look for:
http://www.trade2win.com/boards/showthread.php?p=362564#post362564

These with channel/band deviation form the technical patterns (set-ups) that i look for at identifibale areas of potential support/resistance/sbr/rbs, so for me I find them extremely useful. Divergence is the only way i know to turn a lagging indicator into a potentially leading indicator.

Hi, err every one

Thanks for that, will have a good read later when I return from work
post y later

 

[bbmac]

the screenshot is the hidden/reverse divergence that set-up in gbpusd 15min chart after the recovery (aided by $ -'ve tics data) off lows at 0296 area today. You will see the bol band deviation and the hidden/reverse divergence in the oscillators (what I know as a reentry type 1) at the 61.8% fib of the move down from mondays highs to todays lows. 0386 and 0388 were previous intraday 5min swings too, and Daily l3 cam pivot isat 0383. The set-ups on the 1min (my trigger) and 5min (my intermediate chart) involved Reversal set-ups with oscillator extremes not divergences at that 0383 level. Why Reversal patterns? beacuse the set-ups were against the trends that existed on those charts but with the 15min short trend that still existed. Still existed on 15min and some longer time frames because the last significant lower swing lo and lower swing hi on that time frame hadn't been exceeded by the retrace/pullback/recovery, unlike the trigger (1min) and intermediate (5min) in my config of chart time frames.

Just another example of another type of repeatable high probability divergence pattern that, along with other factors, adds to the confluence of those reasons to enter the market.

Please remember that divergence patterns depend on your choice of oscillators and settings of those oscillators applied to your given style/time frames of trading.