divergence in 1min charts

[VisionTrader]

Wanted to point out a trade using 1M divergence that I find highly reliable. Many times this set up indicates a reversal in direction, manage it properly and you can trade this with confidence.

The opposite signal for a long entry is also the same concept.

The key is three successive peaks on both MACD and Stochastic. Ideally with passing beyond the top or bottom each time.

 

[VisionTrader]

Many people will downplay the noise in the 1M chart. I have come to the conclusion that, properly filtered, the 1M chart is the lauching pad for many nice moves in the ES.

If you trade the signals with the trend....especially reliable. On Friday, it happened. There was a modest pullback and around 2:30 the 1M could have booked you a nice profit on a good signal.
The MACD divergence was modest, but it was there

 

[tradersaavy]

'tis true: 1m can certainly be the launching pad for larger moves.

I see what you mean as well about a reversal within the overall trend.

I had a couple bad weeks and started questioning these 1m divergence reversals. The cliche, trend is your friend, kept coming to mind and I was thinking, is the 1m reversal always going against the trend ? Is this top/bottom picking ?

However, the example that you just posted is a perfect example of a reversal on the 1m which is a pullback/continuation pattern in the larger timeframe uptrend. It is a nice 15m pullback.

So, being kind of new at this, I suppose the, what now seems like an obvious simple answer, is: if trading a 1m reversal against a larger timeframe trend, either do not take these trades or get ready to get out quickly.

But then again, trading a 1m reversal against the larger timeframe trend just might be catching the larger timeframe reversal too. Hmmmm...... this is what makes trading fun, right ?

 

[VisionTrader]

Manange your stops. Two points are there very often. Then let it go and get some more if available. Get out on a divergence buy signal on the 1M.

Clear as mud.

 

[VisionTrader]

Just another reversal signal on the pivot from the lowly 1M chart today that was good for 10 points.

I can certainly understand why the big boys think this is a waste of time.

 

[gotta_trade]

Quote from VisionTrader:

No man ever got lost on a straight road

Hi VisionTrader,

Great signature.

I wrote that one down!!

Thanks,
gotta_trade

 

[electron]

Quote from bone:

IMHO the posts I see on Elite from traders using multiple candle formations and divergence on one minute charts is just not realistic. I'm not saying to discard one minute timeframes - I'm just saying that trying to divine too much from them is not realistic. You'd be better served just tape-reading and trading order flow as a short-term daytrader.

They still can be traded successufully if filtered properly either by higher time frames or some other methods. Using them without any filters is not a good idea if what you aim at is quality and not quantity. Most newbies want quantity (action) so they would kill for any sign of divergence even on a 1 min time frame. More mature traders are well aware that it is the quality and not the quantity that truly matters: less work, same money.

 

[SWJ12]

Quote from tradersaavy:

Keepn' these darn 1m chats alive:

What about the failed head & shoulders with trendline break at about 12:12? (Look at the two red candles below the "ed" in "Uptrended"). You had MACD divergence as well as a few other oscillators.

I was never a fan of H&S patterns b/c they always look good in hindsight.

 

[SWJ12]

Quote from VisionTrader:

Many people will downplay the noise in the 1M chart. I have come to the conclusion that, properly filtered, the 1M chart is the lauching pad for many nice moves in the ES.

If you trade the signals with the trend....especially reliable. On Friday, it happened. There was a modest pullback and around 2:30 the 1M could have booked you a nice profit on a good signal.
The MACD divergence was modest, but it was there

What about the divergence sell signals at 13:43 and 14:07-08? Seems so easy in hindsight but divergence is much more difficult in real-time (a comment, not a criticism).

BTW, if you are paper trading, have you considered the potential of losing 1 tick spread each way? Slippage makes paper trading short-term divergence trades almost useless, IMHO.

 

[VisionTrader]

Quote from SWJ12:



What about the failed head & shoulders with trendline break at about 12:12? (Look at the two red candles below the "ed" in "Uptrended"). You had MACD divergence as well as a few other oscillators.

I was never a fan of H&S patterns b/c they always look good in hindsight.

I will take a look at this, but other than DT's and DB's don't look at anything else.

What chart. What day. ES?