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Chapter 18, Part II. Trading Divergences. Page 7

Discussion in 'Complete Trading Education- Forex Military School' started by Sive Morten, Dec 21, 2013.

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  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Commander in Pips: Here is another example of DP but now on weekly Aussie dollar:


    Chart #6 | weekly AUD/USD and Dynamic Pressure
    [​IMG]

    This chart we’ve analyzed in our weekly research trend, by the way. See – although trend has turn bearish, price action does not support it and creates higher lows. In general price stands flat with some inkling on upward tendency. This tells that bulls are strong, and the minimum what we have to expect in such environment is taking out of previous highs. Although they are seemed close, this is weekly chart, so that’s a not small move. As we can see, market continue move up even further.

    Pipruit: Ok, looks like, I’ve got an idea, and probably I could manage even without MACDP, although it really shows this pattern much clearer than simple MACD. But, Sir, how we should act, when we see it?​

    Commander in Pips: The trading technique of DP could be as follows:

    1. Identify DP. Market has to show confirmed by close price downtrend, based on MACD, while price itself should stand in sideways move.

    2. It’s preferable if price forms higher lows/lower highs at bear/bull trend, and bar closes are near top/bottom;

    3. The enter signal is the first bar that confirms the trend shifting up/down. Stop could be placed below/above this bar.

    Pipruit: Sounds a bit cloudy. Could you show it on real example, say, the same AUD chart?​
     
    #1 Sive Morten, Dec 21, 2013
    Lasted edited by : Apr 16, 2016
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