Divergence--untamed beast or man's best friend?

[Optionpro007]

Quote from Charlie Dow:

If you put that on canvas, I'll buy a copy.

You got so much money ??

 

[ER9]

The only time iv'e had problems with divergence signals is in moderate to strong trends. Divergent signals alone have been very unreliable for me at those times. Seems very accurate in sideways conditions though and well suited for trading those 3 and 5 minute swings.

 

[thruline]

Higher TF shows reverse divergence. Big divergence on lower TF. BBs become support/resistance points for profit taking.

BB setup compliments of JR97.

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[thruline]

Very similar setup to previous post on sell side.

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[thruline]

The attached chart shows explosive move after BB contraction on higher TF--with divergence of course.

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[thruline]

Lower TF range contractions line up with resistance on higher TF.

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[nononsense]

thruline,

I'll give away my biggest secret. Divergence goes hand in hand with Trend. Don't forget that you got to read it upside down though.

hph,
nononsense

 

[thruline]

Nononsense:

Certainly appreciate the trend considerations for which you are famous. I look for 'divergence continuation' trades that are in keeping with longer term trend; like the one posted prior to your post.

Having said that, trends have to begin somewhere and, when my conditions are met I'll jump in early on a move against the current trend on that TF.

Haven't worked out the upside down thing yet....

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[thruline]

Large divergence, entry above initial resistance on lower TF, confirmation on higher TF.

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[thruline]

This is a continuation move after a sell that didn't work out. Both time frames strong support for buy based on support, price action and divergence.