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Divergence

Can Divergence Take control at trendlineThere were two possible trades, Daily chart and hourly chart are showing two different game plans, yes Daily close is above the trendline but hourly close is below the trend line with a possible divergence. Eicher motor have taken support on trendline (on daily chart) and also Recent Low will act as support. If the previous low of 27021 taken down then can have a nice fall till 25500. Meanwhile Going above 27400 can take to 27900 28400. Plan your trade accordingly.
BSE:EICHERMOT
by Eatsleeprepeat
Nifty: A Simple Strategy Yielding Lacs.I am surprised to see how this simple strategy could yield such handsome return in the Index futures. Time Period= 1 June till date Chart= 15 min. Rules: 1. Divergence on Stochastics associated with inverse price movement 2. Entry @ break above/below immediately preceding "minor" swing high/low 3. Stop @ below/above immediately preceding "significant" swing low/high 4. Target @ immediately preceding "significant" swing high/low point 5. Would not trigger entry on gap openings, wait for price to pull back to entry or else trade will be missed 6. After entry, if target missed by few points then close position on break of a succeeding minor swing or consolidation pattern, whichever hits earlier 7. Minimum Risk to Reward Ratio should be 1:1 or else trade will be missed. 8. No support or resistance from higher time frame taken into account 9. All the entries taken with Stop loss and Limit orders. 10. Carry forward as long as target or stop is not hit. Trades: Trade1=33 pts. Trade2=16* Trade3=31 Trade4=34 Trade5=32 Trade6=13* Trade7=47 Trade8=37 Total= 243 Profit on single lot= 243*75=18225 For earning 1 Lac or more one should have traded at least 6 lots. * In Trade 2 and 6 target was missed by a few points so as per rules the position is closed at the break of succeeding consolidations pattern. #Trade missed @ Divergence 3 because of poor RRR Although this strategy yielded 100% success with no Stops hit yet it should be noted that we totally missed the shorting opportunity from 9700 to 9565 on 22nd June. The strategy might be successful in sideways to moderately bearish/bullish environment. Will it be good in a trending market is still a question mark for me, perhaps we will get the answer in coming days. Kindly cooperate if am wrong in my calculations somewhere but i suppose the purpose of this post is clear to everybody. Trade safe, stay healthy. Best Regards Afraidtotrade
NSE:NIFTYEducation
by Bravetotrade
35
Be Cautious!! { Negative RSI Divergance }On the daily charts of Piramal Enterprise, Negative RSI Divergance has been formed... Looking towards price, it is standing on important support... RSI Negative Divergance is indicating that it may break that support, If it breaks that support we may see more down side.. Targets will be 2760/2700/2650/2600 SL will be 2800 If it dosent break that then target will be 2920/2970/3150 SL 2820 Note: Do your own study before making any position... Please Like, Follow and Comment your views below...
NSE:PELShort
by MrAkshatP
Nifty : More with Indicators & Stuff !Indicators ??? On InsiderB post ?! Oh yes & It's not by mistake, for the purpose of explaining few things to the community. The wide spread view on Indicators be it RSI, Macd, stochastic or any indicator is that they lag & always come behind price action, they fail, can't be used for counter in trending markets, n lot more. But, Does any of the strategy out there works 100% of the time without failures ? In the same way Indicators do fail at times & work at times but if the same indicator is used with discipline without switching from one to another every week/day, you will be doing good at trading. So all of sudden I support Indicator usage ? I support all kinds of trading except gambling without a plan, its just that most of times I don't use indicator to take a trade, for very few setups only I look for RSI else none only price action. During starting phase of trading its more than welcome to use an indicator. Why ? Bcos it takes out the confusions for you indicating a direction for you, leave about trade fails or wins, if the same indicator & setup is followed every single time you can simply make money with an Indicator & moving averages. Bcos the winners will compensate the money you lost but only thing same process needs to be repeated for trading every single time. Marked those 1 & 2 just to show how they work normally, 2 being normal scenario they are well aligned with price & as price moves down, Indicator also goes down. But look at 1 . those are opposed, its divergence. The zones marked ( circled white), first two worked n next failed. There is Normal divergence & Hidden divergence and if you google you will find those variations & there are different school of thoughts which conflict which each other calling same divergence as Bullish & Bearish. And, last point as I shown Macd, it doesn't mean I'm following it :) Points to take home : i) Indicators has its flaws, Not failure ii) If followed consistently it makes money InsiderB
NSE:NIFTY
by InsiderB
20
Stochastic: Oscillate the Right Way – A study of SBIDeveloped by George Lane in 1950 – Stochastic (SO) is a momentum oscillator, that is, it follows the momentum of price. Its value oscillates between 0 to 100. The general interpretation of SO is that stock is overbought when SO value is above 80 and oversold below 20. But to what extent this interpretation is correct? Let’s find out. I am taking State Bank's weekly chart (random pick) 2013 onwards. Although the study is applicable to all time frames yet it is more reliable on larger timeframes. The smaller timeframes can always be used for better entries and exits. I am taking only %D line which is 3 period MA of %K (not showing here on SO chart) which represents the current value of SO. The reason for choosing %D is that it is smooth and less noisy. A cross of %K over %D is used as buy and sell signals. But a lot of false signals are generated through this system as it noisy in case of volatile stocks, so I am ignoring this system in this study. Overbought Zones and Rallies Let’s first concentrate on points where SO cross above 80 Point C: Stock rallied 57% Point E: Stock rallied 20% Point I: Stock rallied 29% Point K: Stock rallied 7% Oversold Zones and Falls Now concentrate on points where SO value crossed below 20 Point a: Stock fell -25% Point c: Stock fell -9% Points e,f: Stock almost flat Point g: Stock fell -11% Point h: Stock fell -33% So is it a good practice to sell a stock because SO is above 80? Absolutely not, rather when SO value crosses 80 a buy should be triggered because stock is in bullish momentum. Same is true for SO cross below 20, it generates sell signal. Divergence and Price oscillation: Another Interpretation Another interpretation of SO is through Divergence. Means when price is making higher peaks but SO is making lower peaks or stock making lower troughs and SO making higher troughs. Between points b and d: huge divergence on SO, Price flat at D1; rally 93% At F: Divergence with rising price (D2); initial fall 23%, total fall 55% At i: Divergence with price fall (D3); rally 80% At J: Divergence(red line) with price rise (D4), fall 16% but SO didn’t touch 20 this time, while it did in above 3 cases At L: Divergence(red line) with price rise (D5); Fall so far 10% So will it be right to trust divergence? Absolutely, as it is followed by massive price movement. But will be right to trust only divergence for buy or sell? Absolutely not, it should always be used in conjunction with other price action signals. And now the big question, what is the present scenario in this chart? Look at the divergence on SO (thick yellow line) and the price movement of the stock and interpret yourself. Play safe, stay healthy and like if u can.
NSE:SBINEducation
by Bravetotrade
10
[ Bullish ]......Symmetric Triangle with Positive RSI DiverganceNSE: 3MINDIA is beautifully forming a Symmetric Triangle with a Positive RSI Divergance on Weekly Charts... This scrip is getting ready for making a big move in next few weeks... Current Market Price is 11,600 Currently it is in downtrend and may fall upto 11,000 to 11,150 and could take support over 100 Days Moving Average which would be opportunity for making long positons... Do your own study before making any positions... Please Like, Follow and comment your views...
NSE:3MINDIALong
by MrAkshatP
2
Positive Divergance in USD/INR daily chartsIn the charts of USD/INR price is froming Lower Lows (LL) and RSI is forming Higher High (H H) within oversold zones... It is expected that whenever these types of divergence is formed it seems to be Price Reversal... I have made a long position at a price of 64.85 looking after this divergence... Note: Do your own study before making any position.. Please Like, Follow, and Comment your views too.. :) You can also see divergence related research which were accurate previously below related ideas...
Long
by MrAkshatP
1