SFX Divergent Daily Advice

[SoundFX]

Hey, Bobnat,

I'm at work now so can't post a screenshot til later. Please remind me if I forget. Anyway, to me the point of divergence is more of an art than a science. For example, in a downtrend, its the lowest price peak where the significant divergence occurs. By significant, I mean that I need to see "low to lower-low" price action with a non-high-violating retracement between. Tough to explain, easy to illustrate. So the idea is that even if price doesn't immediately react away from the point of divergence, I will judiciously trade my way back up to that point. Clear as mud? If I were to rationalize it, it probably is just that the divergence point denotes a significant S/R point which the market is likely to be drawn back to. "X marks the spot" so to speak. The greater trick is in profiting even when the market doesn't make it all the way within a few days/weeks.

EUR bounced nicely off the 15M trend line. Let's see what happens.

[SoundFX]

Selling more EUR/JPY at 50.11 with a stop ONLY on these additional lots at 150.26. So even if the stop is hiut, I'll be short. Just playing off a trendline and 1M div. Could be either a small loss or a big gain. That's the way to play!!

[mosad2]

Originally Posted by SoundFX

Could be either a small loss or a big gain. That's the way to play!!

Nice R/R trade
Im taking it as well

[SoundFX]

We'll see, Mosad! Late posting, sold another USD/JPY at 85 with a stop over the latest peak as well.

[Atomised]

Originally Posted by SoundFX

Selling more EUR/JPY at 50.11 with a stop ONLY on these additional lots at 150.26. So even if the stop is hiut, I'll be short. Just playing off a trendline and 1M div. Could be either a small loss or a big gain. That's the way to play!!

And there was me thinking u didn't use stops !

Cable doesn't seem to have much interest in going much further north, u still confident of your short or ?

[SoundFX]

Originally Posted by Atomised

And there was me thinking u didn't use stops !

Eh, I usually don't. There are some circumstances where I deem it necessary, as these additional lots were taken based on my initial divergence reasoning, but mostly on trendline bounces, so I wanted to get stopped out just in case. There's a time and place for everything I suppose.

[SoundFX]

Looks like cable wants to pick up a few more bulls by heading south for a bit.

[bobnat]

Sound,

Thanks for the explanation, it helped, but I think a visual example would be a bit clearer.

Nat