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Originally Posted by Switchjohnny
Does anyone out there have a good system to pick MACD Divergence calls in a large trending market? For example during a day when the GBP/USD moves 100+ pips in a direction, there is usually a few false divergence calls. You'll see divergence, then it'll continue in that same direction, often giving 2-5 false divergence calls until it reaches the top of the trend and reverses.
Does anyone have a clear/simple way to determine if a divergence signal is good?
Like in this image, there was a divergence call, then price continued upward and created a second divergence call. Is there a clear way to trade this so I do not take the first divergence call? Something that is fast? |
hi Switchjohnny...try to give some input...hope this help u.
watch the histogram & the zero line...if the divergence occured & the histogram remain below/above zero line, that will give u true divergence.
also alert to "hidden divergence"....in yur 1st chart, after the regular divergence happened, the "hidden divergence" came...that was the sign that market will continue the trend not reverse.
so beware, use the divergence as an "early sign" not a place to enter the market.
just my 2 cent.