Question about Divergence

F

Flashboy

In stochastics when referring to divergence.. lets say.. like this morning in Emini sp..

Price makes lower low at 12:15 est..

Now when they say price makes lower low and stochastics makes higher low.. thats a divergence and a buy signal..

What line has to make the higher low in the stochastics.. both the fast and slow line..

Or is it the slow line you're supposed to be looking at..

As I'm writing this in the emini.. price made lower low.. and only the stochastics fast line %D made a higher low.. the %K line made the same low basically..

So would this qualify for a buy??

Price has rallied 1.5 pts as of this writing..


Thanks for any help and good luck to everyone..
 
Depends on how you use it, what your settings are, and what your strategy is. Within the context of my particular strategy, the %D is fairly useless, so I only use the %K, which showed a lower low on the 5m.
 
I learned how to trade stochastics about 10
years ago thru private tutoring from Mr. George Lane, whom some
claim to be "the authority" on stochastics. Now, with that said, that doesn't mean what I'm saying is the final word. I just wanted you to know where I'm getting my info.


Now when they say price makes lower low and stochastics makes higher low.. thats a divergence and a buy signal..

Actually, that's a convergence

What line has to make the higher low in the stochastics.. both the fast and slow line..


Preferably both, but if you want to favor one over the other, I'd watch the %D



As I'm writing this in the emini.. price made lower low.. and only the stochastics fast line %D made a higher low.. the %K line made the same low basically..So would this qualify for a buy??

The %D should be your "Slower" line. If that's
what you meant, if you get a nice reversal bar, then I'd go for it.




Price has rallied 1.5 pts as of this writing..


I attached a chart showing an example of
each setup, a divergence and a convergence.

Good Luck!
More...
 

Attachments

Quote from dbphoenix:

Depends on how you use it, what your settings are, and what your strategy is. Within the context of my particular strategy, the %D is fairly useless, so I only use the %K, which showed a lower low on the 5m.
More...

dp,

Thanks.. My 5 min. chart looks like %K made the same low basically.

My settings at %K 21, %D 14..
 
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