Vdubus Divergence Wave Theory - MT4/MT5 Resources
This post is a continuation of the trading strategy I posted here: https://www.forexfactory.com/showthr...69#post9221169
Okay, so mainly focus on trading divergences because early in my trading career I discovered an algorithm hidden in "all oscillators" that follows one simple rule
- Divergence predicts the next trend breakout and/or reversal. (please refer to my previous post)
It wasn't until recently that I started paying attention to MacD's histograms. I thought it was unreliable...until now.
We are all very familiar with divergences and hidden divergences, but they have no real relationship to price pattern formation.
The rules are simple:
Follow the money!
1. to 2. = disagreement
2. to 3 = No Divergence = Weak = Reversal/Breakout
The secret is to identify weakness (no divergence) as to its opposite, either a regular divergence or a hidden divergence that favors a trend continuation setup.
Please note the last chart. The breakout of its pattern is itself a valid signal. ie. The histogram formed a new lower low, indicating a bearish signal and a divergent breakout to the downside.
...enjoy
===================
Okay, so mainly focus on trading divergences because early in my trading career I discovered an algorithm hidden in "all oscillators" that follows one simple rule
- Divergence predicts the next trend breakout and/or reversal. (please refer to my previous post)
It wasn't until recently that I started paying attention to MacD's histograms. I thought it was unreliable...until now.
We are all very familiar with divergences and hidden divergences, but they have no real relationship to price pattern formation.
The rules are simple:
Follow the money!
1. to 2. = disagreement
2. to 3 = No Divergence = Weak = Reversal/Breakout
The secret is to identify weakness (no divergence) as to its opposite, either a regular divergence or a hidden divergence that favors a trend continuation setup.
Please note the last chart. The breakout of its pattern is itself a valid signal. ie. The histogram formed a new lower low, indicating a bearish signal and a divergent breakout to the downside.
...enjoy
===================
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