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HOW TO TRADE DIVERGENCES I will discuss one of the methods of trading a divergence. The main advantage of the divergence trading is that you are able to enter the market right at the beginning of the swing. The rules to follow: 1. Spot a difference in a direction of momentum and price 2. Wait for a reversal pattern to complete 3. Enter the market in the direction of the momentum 4. It is not recommended to enter against the main trend (not the same as a price direction) direction. 5. Always have a predetermined short target. 6. If the trade is based only on a divergence, then use a 1st target, otherwise use a partial position close P.S. Divergence trading is a 100% technical, so it's signals are not reliable in a long term, but very useful in a short term swing trading. Your likes is the best motivation for me to keep up :) Any questions are welcome!
Short
by Marenno
EURCAD Potential Short *READ* Rules for Entry Below!FX:EURCAD has been consumed by bearish momentum today and there is still potential to hop on that momentum to pick up some nice profits with minimal risk. Please follow the rules below for how to go about this trade and also please note the short summary below the trading rules that summarizes how this trade set up could be rendered invalid. Please note the following rules below for entry: A corrective retracement to the 1.49275 level 1.49275 level holding as resistance Enter on bearish momentum after the two rules above have been confirmed Stops around 1.49600 Profit whatever you can get (in a perfect world the the lower support level of around 1.48500) This trade will lose its potential if either of the two first rules become no longer applicable. For example if price action fails to retest the 1.49275 level and pushes lower to target before a retest or if the 1.49275 level fails to hold as resistance and price action pushes higher with bullish momentum. You will find that my style of trading often holds a greater risk than reward, however the potential of price action moving in the favor of my position where profit can be liquidated and banked before price action moves against me is very high when the rules are followed. If you find yourself liking my style of trading please feel free to follow me as I will post potential trades like this rather frequently.
Short
by UnknownUnicorn261897
TRADER’S RULES:Let’s glimpse into the basics and do not forget to use these rules. It’s proved - they do work! TRADER’S RULES 1. Always work in the direction of the dominant trend 2. Find the strategy where you are most successful, namely the one that gives the minimum account drawdown 3. Reduce the number and size of transactions in case of losses, and vice versa 4. The main rule of profitable trading is control over losses 5. Plan ahead 6. At any time, assume that your plan is not working 7. Everything that happened is history. Focus on the future 8. Success in this business requires incredible concentration and mental costs. Learn to relax 9. Never allow your winning attitude to became unprofitable 10. If you have done something wrong, immediately close the position 11. If you do not see the possibilities – do not trade 12. Do not be a hero. Do not think that you know more than the market. Work with confidence, but always doubt yourself 13. Never overtrade 14. Do not take risks before and immediately after the release of important economic data. This is not the trading but the gambling 15. Avoid emotions 16. Use not just a price stop, but a time stop. If you are waiting for a breakthrough of the market, and it did not happen, close the position, even if it is in profit.
by djeniks
8
Rule based trading: better to not trade, than lose it allIt's a good idea to come up with a systematic way of trading. I learned a great deal from Tim West, I'm indebted to his teachings. He taught me about the importance of risk management, and how it can trump trading accuracy in the long haul. You can be profitable even with random entries, if your tp is bigger than your stop. That made me think a lot, and I'd like to share one interesting way to look at the markets with everyone. Slap on the weekly and daily pivots, and my WMA Short term bands for example. You can clearly see how you can gauge risk, but using these signals, and estimate your take profit level. A max of 5% risk per trade is a good idea, with 3% being ideal. Don't be overly greedy, and don't try to trade for the sake of it, it's a business and it should be approached seriously. If you do otherwise, you're nothing but gambling. It's a good idea to seek coaching, there are plenty of 'experts' in the internet, and plenty of people willing to take your money. I can vouch for Tim West, his coaching has been of tremendous help to become consistently profitable. Best of luck to everyone in this 2015 that is just beginning. Cheers, Ivan.
by IvanLabrie
3
SPY inverse Head and Shoulders, higher lowsUS markets covered morning losses and closed well on highs. Tech sector and small cap companies continue to diverge from S&P500 and major cap Dow Jones. It makes some traders nervous, and some say it's time for caution but we will measure price action with levels and wil continue to follow our process and rules. Market has switching gears every day, so we should adapt quickly. Don't trade opinion, trade price action. SPY built series of hiher lows, one at $181.51, then another one at $184.96 and yeasterday's low at $186.01. You have this upper range that looks like Inverse Head and Shoulders pattern. Now in order to break out, the SPY need to get above and stay above $188.50-$189
AMEX:SPYLong
by andrew.berg