FAILED Double Botton - NO ENTRY Because Of PARTIAL DIVERGENCE
Having a look at this Double Bottom on the 15 Min Chart,
We see that we a possible chance of reversing to the upside as we had a very popular chart pattern play out known as the Double Bottom.
Double Bottoms patterns are known as reversal patterns and generally occur at the end of a trend or when the trend starts to exhaust.
Ideally, in order for us to get a high probability setup, we need to see the following:
1) Full Divergence on the MACD - This means that on the two extreme lows, or the peaks of the W - We need to see the macD climbing back up. We need to see this on the Histogram as well as the MA lines.
This would confirm for us that we indeed have full divergence. What do we see here? ONLY PARTIAL Divergence. There was divergence on the Histogram but NOT on the MA lines.
2) Would like to see the middle risen point of the W take out a previous point in price action so we can clearly see that its broken previous resistance. We did NOT see this here.
We can see that our entry WOULD have been on the retrace of the NECK Zone Highlighted in Yellow.
Price broke through the neck zone and retraced pack into it. However, it did not continue moving up and just as well because this set up did NOT present us with an entry.
As we can see, had we taken this entry we would have been stopped out!
We see that we a possible chance of reversing to the upside as we had a very popular chart pattern play out known as the Double Bottom.
Double Bottoms patterns are known as reversal patterns and generally occur at the end of a trend or when the trend starts to exhaust.
Ideally, in order for us to get a high probability setup, we need to see the following:
1) Full Divergence on the MACD - This means that on the two extreme lows, or the peaks of the W - We need to see the macD climbing back up. We need to see this on the Histogram as well as the MA lines.
This would confirm for us that we indeed have full divergence. What do we see here? ONLY PARTIAL Divergence. There was divergence on the Histogram but NOT on the MA lines.
2) Would like to see the middle risen point of the W take out a previous point in price action so we can clearly see that its broken previous resistance. We did NOT see this here.
We can see that our entry WOULD have been on the retrace of the NECK Zone Highlighted in Yellow.
Price broke through the neck zone and retraced pack into it. However, it did not continue moving up and just as well because this set up did NOT present us with an entry.
As we can see, had we taken this entry we would have been stopped out!