Complex trading system #3 (MACD Divergence)
Submitted by Edward Revy on April 19, 2007 - 16:55.
Currency: EUR/USD (preferred) or any other.
Time frame: 30 min.
Indicators: MACD (5, 26, 1) – draw 0 line,
Full Stochastic (14, 3, 3)
EMA 3
SMA 13
Trading rules: watch for divergence between the price on the chart and MACD or between price on the chart and Stochastic.
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Please explain more about the definition of "divergence" and how it is represented on a chart. Thanks for all the great information Edward. As a newbie to forex, this is all great stuff!!!
I agree! Im not a day trader, I'm a position trader and my trading system is based 100% on MACD Bullish and Bearish Divergences,,thats it! When theres a MACD BEARISH DIVERGENCE i go short when the MACD crosses and put a protective stop on the last high! (Vice versa for going long)
Very low risk trade high potential trading.
Then if the divergence carries, if im short i just put a protective stop 5 ticks above the last high and walk it down like a flight of stairs. Some of my divergence trades last over a month! Then when i get stopped out i go look for other markets with a divergence. Also, when a divergence doesn't go anywhere, most of the time you don't get hurt!! Your loss is very small OR by then you at least have your stop brought to breakeven!
DIVERGENCE trading is only system i have found where i have a lot of confidence in taking the trade, i dont second guess it i just place the trade. For me Divergence trading is very low stress trading!
i like divergence ; ) i think it`s most powerful phenomen on trading
gud stuff, not properly researched, work harder, all the same, thumbs up!!
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