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!
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!
Comment:
it's funny how the market is changing, even while I was writing this post, that's why I think that confirmation by the price pattern formation is important.
