MACD divergence on 28 November

[fxsport]

Hey there

Could anyone recommend a good TA book on divergence?

Thanks

[birdjaguar]

”Technical Analysis Applications” is the one book that every trader should read to understand what technical analysis can do for investing programs, what it cannot do, and how to use charting to understand and act on market tendencies in a wide variety of situations.”


Cornelius Luca

Divergence trades are counter-trend. This is not a recommended starting point. If you must trade this way, start small. Always use stops. Practice patience by waiting on a double divergence. Think of the way the Lion hunts. Although he has great athletic prowess, he doesn't go after the big, strong trend that may fake him out or step on his head. He goes after the weak, exhausted trend that is barely ambling along and can hardly go any further.

[birdjaguar]

Originally Posted by SoundFX

Thanks, Bird. Did you take a short at 7800 or are you still taking a long-term LONG view?

-SFX

Sorry, I missed your post. I also missed the 1.7800 GBP/USD short. I honestly thought the GBP would continue higher on strong momentum, so I didn't take the short. Now, we are actually below the 200 week EMA which comes in at around 1.7338. Price stalled there but didn't bounce. I am still looking to get long. But I will see what happens in the 1.7245/50 area and then the next support is 1.7050-1.7080 in my view. I am really not a long term player. I just try to wait on the best opportunities. I trade many pairs and wait on the better opportunities in each. Then I hold from 1 to 5 days. I am a swing trader. I never found a strategy for day trading that worked for me. Happy trading.

[bhale]

I was going to start another post, but I think this one is the proper place. Some of the posts have wandered, but the belief that MACD divergenve works is prevalent and I am a believer too.
I have been using it with default parameters, 30M to 1HR, and this has been working with 90% accuracy. I have been trading mini lots, real money, and am up 800+ this month. Mostly on 1 or 2 lot trades.
I second guess a lot and missed at least 5 profitable trades this month by not taking the signals. My New Years resolution is to trade every signal. It sometimes takes several hours to develop, but is a great tool for scaling into trades.

[jrinvestors]

BIRD:
waiting on double divergences is indeed a sound practice, but will make you lose a lot of profitable trades. I beleive is better to use a divergence w/ o/s or o/b conditions, cuz that's what might determine that the trend is getting exhausted.
Indeed, you might have to enter more than once ($ cost avg) but that is why i advice using mini lots in place of a 6 figure acct. Since I have kept my dairy i see it working. One of the latest one was the nzd/jpy rise. I started shorting and kept shorting all the way up. The rest is history. I only wish i would have stayed for the complete ride down, but didn't expect the nzd to get that weak and the jpy that strong.
My 2 currencies
Richard