Hidden Divergence Trades

Here was a trend following ER2 HD Long from yesterday that had a great signal for entry.....

er2long.jpg


Here was dual "back to back" trend following HD trade entries as the ER2 was holding a good trend......

ER2HD2.jpg


When the market gets into strong trends I look for areas to get on board, and there was a lot of these trend following signals again today.
 
looks interesting, but hard to see what it all means without knowing the settings of stochastics.

What are the settings?
 
Well the good thing is that you can use what ever current settings that you prefer...the main point is to look for set-ups that are of the proper configuration which I have detailed.

I use 5,5,2 for my trading and I take these signals in context of the previous price action and price channel positioning (price channels are not drawn on these charts).
 
Trend following HD short trade from the selling off todays highs


<IMG src=http://i218.photobucket.com/albums/cc102/thesecrettrader/ER2HD3.jpg width=800>
 
<i>"this is all very nice, shows you well where to get in, but ... where do you get out ..."</i>

Trade entries and trade exits are two completely separate factors. There is zero correlation between the two.

Trade entry signals identify key spots on a chart where price action is probable to go one way or the other from there.

Trade exit decisions are based upon timeframe of chart traded, expected distance of underlying traveled (aka pivot points, Fib projections or retracements, gaps, highs / lows, etc) and also whether partial exits on a scale or all-out tactics are used.

Ten different traders may enter the exact-same tick on a chart for ten unrelated reasons. What the market does from there is exactly equal for everyone, regardless. How they manage their trades to execution is strictly up to them, absolutely no relation to reasons for entry in the first place.
 
Quote from austinp:

<i>"this is all very nice, shows you well where to get in, but ... where do you get out ..."</i>

Trade entries and trade exits are two completely separate factors. There is zero correlation between the two.

Trade entry signals identify key spots on a chart where price action is probable to go one way or the other from there.

Trade exit decisions are based upon timeframe of chart traded, expected distance of underlying traveled (aka pivot points, Fib projections or retracements, gaps, highs / lows, etc) and also whether partial exits on a scale or all-out tactics are used.

Ten different traders may enter the exact-same tick on a chart for ten unrelated reasons. What the market does from there is exactly equal for everyone, regardless. How they manage their trades to execution is strictly up to them, absolutely no relation to reasons for entry in the first place.
More...

Nice post Austin
 
This post reminds me of the movie "A Beautiful Mind".

All of the signals you posted were simple flag patterns in a trending market that popped up to the 20ema.

Your method is simply to "look for a flag pattern back into the 20ema of a trending market" and when the stoch turns, then take your entry.

It's a very simple, but effective entry for any stock or futures contract.

No need to make it complicated. We all have "A Beautiful Mind".
 
Quote from austinp:

<i>"this is all very nice, shows you well where to get in, but ... where do you get out ..."</i>

Trade entries and trade exits are two completely separate factors. There is zero correlation between the two.

Trade entry signals identify key spots on a chart where price action is probable to go one way or the other from there.

Trade exit decisions are based upon timeframe of chart traded, expected distance of underlying traveled (aka pivot points, Fib projections or retracements, gaps, highs / lows, etc) and also whether partial exits on a scale or all-out tactics are used.

Ten different traders may enter the exact-same tick on a chart for ten unrelated reasons. What the market does from there is exactly equal for everyone, regardless. How they manage their trades to execution is strictly up to them, absolutely no relation to reasons for entry in the first place.
More...

Well stated and to add . . .

Divergences are like hanging your hat on a game of Russian Roulette, it's wonderful when it works but fatal when it doesn't.
 
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