Saturday, May 19, 2012

6E - Divergence on multiple timeframe

Trading divergencies is not easy, even though the chart in hindsight always shows that it works.  Here is a good example of divergences in control. The continued downtrend from 1.3287  fell 643 ticks and made a low print at 1.2644, building a bull wedge to the low and creating multiple divergencies on MACD on multiple timeframe charts.  The bounce made it to 23.6% Fib retracement level, 1.2796, which is a whopping 152 ticks move from the low. This proves that the divergencies can be traded. Although, all trading rules must be applied to take advantage of this trade setup and analysis as always, which include patience and discipline. I believe practice makes it perfect, so keep trying and it can be done. One thing is for sure, market will always provide a new setup, whether you can take advantage of it or not is up to you.

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