Who agree's? Momentum divergence is the only leading indicator.

[trader2419]

Hello everyone. I have been developing a strategy for the last year revolving around trading multilple points of divergence using any oscillator of choice. I was just wondering who ( that daytrade ES,fx, etc successfully) somehow institute divergence into their trading strategy. Divergence is discussed very rarely among traders. Is it because momentum-price divergence is the only leading indicator in the market. is it because it is a powerful tool and they dont want many people looking into it. Who thinks mutliple points of divergence coupled the price tagging outside of a bollinger band a strong signal???
thanks all for any feedback..

 

[rathcoole_exile]

yep, divergence can be very powerful but I haven't yet found that Momentum is necessarily any better than say, RSI or MACD divergence.
If I had to plum for one indicator only for divergence, I guess it would have to be the little known "inertia"

with regards to price closing outside of BB, are you talking about it signalling a reversal or a continuation ?
I use closes outside the Keltner Channel, somewhat similar to BBs, to look for potential price reversals, mostly as an exit signal to an existing trade.

 

[zupcon]

I think you'll find BBMac's thread here at T2W of interest.

 

[fibonelli]

Trading divergences, without analysing Support (Demand)/Resistance (Supply), Trend Characteristics and Price Action etc, is like walking with a blindfold on.

BBMAC's threads are highly recommended.

 

[trader2419]

Thank you guys for the info. I will check out his posts. What I am trying to do is to trade in the direction of a bigger time frame trend, while looking for divergence in the direction of the trend on a smaller time frame trigger chart. Has anyone tried using the trix or %b indicator oscillators for measuring momentum and price divergecnce???
Thanks again!!

 

[TEAMTRADER]

Choppy Sideways and divergence

I'll use this old thread because I thought divergence may be of help to those who suffer in sideways choppy markets.
The indicators are stochs setting 144 and 233 both at slow 13 and D of 3 for the 233 and 5 for the 144. OB/OS areas are 90/10 for 144 and 85/15 for 233. These are specific settings for the 4hr charts.
All trendlines on indicators are started in the OB and OS areas.
All items marked 1 – 5 are the indicator following the price as is item 7.
Items marked 6 and 8 are hidden divergence and buy divergence respectively.
The item 8 is huge in comparison with 6 (the angles are the obvious clue).
This is one way to assess the end of a choppy period and the beginning of a trend.
Obviously this means that a manual chart management using trendline traps is necessary but I hope this helps.
Happy New Year
TEAMTRADER

 

[Forexmospherian]

I'll use this old thread because I thought divergence may be of help to those who suffer in sideways choppy markets.
The indicators are stochs setting 144 and 233 both at slow 13 and D of 3 for the 233 and 5 for the 144. OB/OS areas are 90/10 for 144 and 85/15 for 233. These are specific settings for the 4hr charts.
All trendlines on indicators are started in the OB and OS areas.
All items marked 1 – 5 are the indicator following the price as is item 7.
Items marked 6 and 8 are hidden divergence and buy divergence respectively.
The item 8 is huge in comparison with 6 (the angles are the obvious clue).
This is one way to assess the end of a choppy period and the beginning of a trend.
Obviously this means that a manual chart management using trendline traps is necessary but I hope this helps.
Happy New Year
TEAMTRADER

Hi TEAMTRADER

An excellent example on a 4 hr chart and with the UJ for this last year.

With you use mentioning angles - do you use ray lines at all with your trendlines at OB and OS points ? - maybe even on 30 or 60 min charts as they can help the daily changes etc - allowing better RR's or assisting with pyramiding and peeling if you are a longer term trader

Good Trading and I hope you have a great 2015


Regards


F

 

[NVP]

Hello everyone. I have been developing a strategy for the last year revolving around trading multilple points of divergence using any oscillator of choice. I was just wondering who ( that daytrade ES,fx, etc successfully) somehow institute divergence into their trading strategy. Divergence is discussed very rarely among traders. Is it because momentum-price divergence is the only leading indicator in the market. is it because it is a powerful tool and they dont want many people looking into it. Who thinks mutliple points of divergence coupled the price tagging outside of a bollinger band a strong signal???
thanks all for any feedback..

lets be honest .......none of us have the slightest idea what a market is going to do next.............all we do is assess the historic behaviour and extrapolate based on these machinations ........

you can either then

1) assume a historic price direction will continue (trend)
2) assume a historic price direction will reverse
3) or assume price will fade into neutrality mode

most people are hunting 1).........and theres a million tools to do that.........but as mentioned .....its still all a % game ..............

good hunting

N:smart:

 

[TEAMTRADER]

Hi TEAMTRADER

An excellent example on a 4 hr chart and with the UJ for this last year.

With you use mentioning angles - do you use ray lines at all with your trendlines at OB and OS points ? - maybe even on 30 or 60 min charts as they can help the daily changes etc - allowing better RR's or assisting with pyramiding and peeling if you are a longer term trader

Good Trading and I hope you have a great 2015


Regards


F

Hi Forexmospherian,
Yes, when I used to scalp, I used trendlines (traps I call them) on both screen and on the indicators. However just like offline, all timeframe charts need to have specific settings for them so one 'fit-all' template is not something that can be transferred from one TF to another.
Using traps based on OB and OS areas of indicators is a low risk high reward strategy but as I am retired now I only have this as a hobby whereas previously it was my occupation. I'm currently applying my scalping experience to all timeframe charts (and particularly offline charts) looking for a better RR for a pal who is trading my capital so I fully understand why the question was asked.
Regarding angles - generally if there is a disparity on screen and on the indicator then this is a good sign for a 'springboard' trade, one where the price moves faster than usual.
I'll look again at these type of trades over the next couple of weeks to see if there is a recognisable pattern, given a set template, and I'll let you know. However, it is far, far easier and safer to trade offline than it is to trade TF charts.
TEAMTRADER