divergence in 1min charts

Quote from Thunderdog:

NihabaAshi,

With due respect, I think you may have missed the point Breakout was trying to make, and with which I agree, as per my prior post. However, I should let Breakout speak for himself.

Regards,

Thunderdog [/B]
More...

Thunderdog,

You may be right...I probably missed the point Breakout was explaining.

Breakout speaks well for himself and I'm sure will correct me if I misinterpreted what he was saying.

However...the thread started via discussing divergence in general via the 1min chart...

Yet...there are dozens and dozens of types of divergence signals out there via all types of different indicators or price action alone methods (no indicators)...

For example...there's a current thread here on Trading Hammers (White Candlesticks) via divergence confirmation although the the thread is mainly about the White Hammer line itself.

If one particular type of divergence signal works for someone via the 1min chart...keep using it.

If it doesn't...don't use it.

We all have different trade methodologies from one trader to the next trader...

its obvious to me that one strategy that works for one trader may not work for another trader...

simply via the different trade methodology and/or trade management.

That's the only point I'm trying to make.

NihabaAshi
 
Quote from NihabaAshi:



Thunderdog,

You may be right...I probably missed the point Breakout was explaining.

Breakout speaks well for himself and I'm sure will correct me if I misinterpreted what he was saying.
More...

Thanks, I appreciate the compliment. Sometimes I feel like
a babbling fool!...hehe

Actually, you're both right!

I was making 2 points. One was aligned with your point,
that if we use an oscillator, we should decide on a setting, and
stick to it. Don't tinker around with it all the time.

The other was aligned with Thunderdog, in that the oscillator
isn't really that valuable. You could probably just fade Dbl
top/bottoms or use some kind of reversal bar for entry and do
just as well as someone who waits for a confirmation from an
oscillator.
 
Quote from dgabriel:

I'll be happy to post the next chart I come across that shows what I mean inandlong. After all, I don't want to start an historic investigation, and I gather neither do you!
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That would be great and thanks a lot. As I use macd in almost every entry decision, your insight just might save me some bux on bad entries. I'm always looking for ways to decrease losses.
 
Breakout you reminded me of a trade setup that I have used occasionally when I see it form both intraday and longer term.

You and TD mentioned the double bottom thing. I have used the combination of macd divergence with a market structure low when the price is subjectively far below a 20 or 40 sma. Sometimes price will go ahead and form a third low, you all have seen that, but the macd continues to rise. But most of the time the triple low does not occur and price will revert to the mean.

It is a nice setup and can be used in any time frame.
 
Quote from inandlong:

Breakout you reminded me of a trade setup that I have used occasionally when I see it form both intraday and longer term.

You and TD mentioned the double bottom thing. I have used the combination of macd divergence with a market structure low when the price is subjectively far below a 20 or 40 sma. Sometimes price will go ahead and form a third low, you all have seen that, but the macd continues to rise. But most of the time the triple low does not occur and price will revert to the mean.

It is a nice setup and can be used in any time frame.
More...

Cool...what settings do you use for the macd?
 
A quote from dgabriel :

(1) In both cases, price, volume, and velocity will tell you
what's happening.
(2) They are wholly derived from price, volume, and time.

I have considered using divergence but gave up due to reasons you mentioned but would like to do more research using the points you made above.

Would you please elaborate a little more preferably with a chart or two as to the points you made above?

Also is there a volume oscillator that I should look into and would a divergence in both price and volume oscillators would make a stronger case?

By velocity you mean Momentum, right? In that case one should think twice before going against momentum even if there is a divergence. Am I on the right path?


Thank You,
Jeffrey
 
Jeffrey,

Did you not look at the chart that I posted right above your reply ?

It shows divergence and has labels all over it for explanation.
 
Jeffrey, I seached the quote you posted from me, but, I could not find it. However, what I mean that indicators are derived from price and volume, and can reflect the rate of change of P&V.

With stochastics for example, you can see what is happening with actual price that gives the stochastics its signals, since the stochastics is derived from price (a momentum indicator). But it does not take into account volume which can be a good clue for trading. Nor do indicators have any knowledge about S/R.

If divergences work for you, fine. I'm am not opposed to them at all. I just think it is important to understand exactly what they measure and to understand their mechanics in action. Knowing their popular uses as signal generators alone is insufficient.

PVO is the percent volume oscillator, it may be available in your platform. THe A/D line is a momentum type volume indicator.

By velocity - and I am using that term generically, it does not have a trading specific definition that I know of - I mean the relative rate of change of price.
 
Quote From digabriel,

07-16-03 08:33 AM

“Jeffrey, I seached the quote you posted from me, but, I could not find it.”


Quote From tradersaavy,

07-16-03 07:12 AM

“Jeffrey,

Did you not look at the chart that I posted right above your reply ?

It shows divergence and has labels all over it for explanation.”

First I really appreciate you guys helping me and others :

For clarification :

tradersaavy,

My previous question was asking you guys to illustrate with a chart as to how RSI first and Stochastics next and lastly MACD gave divergence in that order and you did an excellent job of illustrating with charts and I have been working on that too.

My last question was regarding the role of Volume and Velocity when considering the divergence. I would like to know how I can incorporate them for making a stronger case for divergence besides above 3 just price based indicators you talked about.

I am really sorry if I created any confusion. Please do correct me if I am wrong.

Coming to digabriel’s question :

digabriel, I was referring to your post on this same thread posted on 06-19-03 12:35 AM on this thread on 2nd page.

Here is that thread in its entirety.

06-19-03 12:35 AM

You have to understand how the "divergences" emerge. They are usually due to quick price movement (whatever timeframe) where the oscillator had not had time to catch up with price, and mean reversion of price. Conversely, slow price movement followed by faster movement can cause a divergence. In both cases, price, volume, and velocity will tell you what's happening.

Indicators and oscillators are completely useless as standalone. They are wholly derived from price, volume, and time.

When a divergence appears, it can just as often disappear as the oscillator continues in one direction.

Also Let me explain what I asked this time :

07-16-03 07:05 AM
Re: divergence in 1min charts
A quote from digabriel :

(1) In both cases, price, volume, and velocity will tell you
what's happening.
(2) They are wholly derived from price, volume, and time.

I have considered using divergence but gave up due to reasons you mentioned but would like to do more research using the points you made above.

Would you please elaborate a little more preferably with a chart or two as to the points you made above?

Also is there a volume oscillator that I should look into and would a divergence in both price and volume oscillators would make a stronger case?

By velocity you mean Momentum, right? In that case one should think twice before going against momentum even if there is a divergence. Am I on the right path?
I would really appreciate any feedback.

Once again thank you guys. You guys are wonderful and very knowledgeable people always willing to help.

Regards,
Jeffrey3
:)
 
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