Please read very carefully my description.
Triggers - blue impulse and bullish/bearish candlesticks. No fibs, S&R levels,trend lines, multiple time frames. This study is only about the divergence itself. Adding other indicators will probably increase the probability of the trade.
Many misunderstood my previous chart on divergences. It is just a study.
The divergences on this chart have been drawn by going back to 2000 and scrolling day by day. I have not seen this chart before. Of course after going over the chart the first time, I found some more divergences which I outlined. These divergences are very subjective, it is not a science, but for this example, unlike the previous chart, I have used only by the book divergences. I do trade almost divergences, that is when the price doesn't reach the exact same price as in the previous peak or trough, but for this chart I am trying to be as accurate as one can be while being subjective. There are 56 triggers in total, and in my view WHICH IS VERY SUBJECTIVE AND IT DOES NOT MEAN I AM RIGHT !!!, 34 were profitable, by using only the daily chart, without any extra indicators.
You will see that there are very large divergences, and most probably they are weekly divergences (I have not looked at the weekly chart). I considered them too, even though I don't trade them on a daily chart. Wherever there are very large divergences, I wrote that they are weekly divergences so you wont be confused.
There are more divergences on the chart but there is no candle confirmation, and I have written that down on the chart when it was the case.
Because there were some discussions on my previous chart, I will emphasize here that this is in no way a perfect trading strategy, it is not even a proper strategy in the first place, so beginners must be very careful how they look at this chart. Trading divergences can make you loose a lot of money, or they can make you win a lot of money. You have to develop a proper trading system before approaching them. Besides this, the trades shown by the accurate divergences would have never yielded as much as it seems by looking at this chart, because it is impossible to exit at the most extreme point of the trade.
I do believe that divergences are the best signal in Technical analysis, it's just a matter of how you trade them.
Triggers - blue impulse and bullish/bearish candlesticks. No fibs, S&R levels,trend lines, multiple time frames. This study is only about the divergence itself. Adding other indicators will probably increase the probability of the trade.
Many misunderstood my previous chart on divergences. It is just a study.
The divergences on this chart have been drawn by going back to 2000 and scrolling day by day. I have not seen this chart before. Of course after going over the chart the first time, I found some more divergences which I outlined. These divergences are very subjective, it is not a science, but for this example, unlike the previous chart, I have used only by the book divergences. I do trade almost divergences, that is when the price doesn't reach the exact same price as in the previous peak or trough, but for this chart I am trying to be as accurate as one can be while being subjective. There are 56 triggers in total, and in my view WHICH IS VERY SUBJECTIVE AND IT DOES NOT MEAN I AM RIGHT !!!, 34 were profitable, by using only the daily chart, without any extra indicators.
You will see that there are very large divergences, and most probably they are weekly divergences (I have not looked at the weekly chart). I considered them too, even though I don't trade them on a daily chart. Wherever there are very large divergences, I wrote that they are weekly divergences so you wont be confused.
There are more divergences on the chart but there is no candle confirmation, and I have written that down on the chart when it was the case.
Because there were some discussions on my previous chart, I will emphasize here that this is in no way a perfect trading strategy, it is not even a proper strategy in the first place, so beginners must be very careful how they look at this chart. Trading divergences can make you loose a lot of money, or they can make you win a lot of money. You have to develop a proper trading system before approaching them. Besides this, the trades shown by the accurate divergences would have never yielded as much as it seems by looking at this chart, because it is impossible to exit at the most extreme point of the trade.
I do believe that divergences are the best signal in Technical analysis, it's just a matter of how you trade them.
