How to trade with an oscillator

poortrader

Well-Known Member
Positive Hidden Divergence Today on Nifty Futures Nov Series



Please note certain points in playing divergences more accurately.

1) the stoch and price high and lows should be comparable

2) distance of the peaks

In the chart see the divergence - the peaks are exactly comparable. And most importantly they are proper peaks.

Also note that divergences do fail, but just seeing a divergence and entering is not the idea. You need to wait for the move to begin in the direction of the divergence and place a tight SL few ticks below the recent peak/bottom
 

poortrader

Well-Known Member



a) The Hook - 4 bars tgt
b) hidden negative divergence, confirmed with a mini trend line break, high of the pivot as SL
c) Once it crossed the congestion zone it fell rapidly (marked as critical area in chart)
d) part / full profits by trail or by VWAP going over 35
 
You need to wait for the move to begin in the direction of the divergence and place a tight SL few ticks below the recent peak/bottom
I wait for a crossover of the red and green stochs before deciding on a trade.
 

poortrader

Well-Known Member
I wait for a crossover of the red and green stochs before deciding on a trade.
Hi TP,
Did you mean fast crossing the slow from below for bullish trend and fast crossing the slow stoch from above for bearish confirmation? If you can post charts constantly monitoring the failures also then it would help everyone here.

If yes, it is useful at times but I found that it gives many false signals at times, but if price gives the confirmation, it is generally a strong signal. Only thing is that you loose a few points waiting for the confirmation.
 
Hi TP,
Did you mean fast crossing the slow from below for bullish trend and fast crossing the slow stoch from above for bearish confirmation? If you can post charts constantly monitoring the failures also then it would help everyone here.

If yes, it is useful at times but I found that it gives many false signals at times, but if price gives the confirmation, it is generally a strong signal. Only thing is that you loose a few points waiting for the confirmation.
Generally would try to confirm the divergence with direction of RSI. Yes, a few points are lost, but top/bottom fishing has burned many, including yours truly :D
 

poortrader

Well-Known Member
Generally would try to confirm the divergence with direction of RSI. Yes, a few points are lost, but top/bottom fishing has burned many, including yours truly :D
:thumb:
plz post yr trade today if possible, I guess today also you must have taken the same trades with RSI confirmation. It would be helpful for us.
 

rangarajan

Well-Known Member
Posting NF chart today.
Members may pl discuss the following:
NF stayed in O/B for 5 bars.
But also showed Hidden Negative divergence..
Every dip was a Buy & no shorting.Even pivot Low formed to make a Buy.
-ve Divergence,one should have shorted when P/High formed.
So,how one should have traded? Long did not give profit.

 
:thumb:
plz post yr trade today if possible, I guess today also you must have taken the same trades with RSI confirmation. It would be helpful for us.
No.. I am in "no trade" position. Too much uncertainty/volatility.
 

poortrader

Well-Known Member
Posting NF chart today.
Members may pl discuss the following:
NF stayed in O/B for 5 bars.
But also showed Hidden Negative divergence..
Every dip was a Buy & no shorting.Even pivot Low formed to make a Buy.
-ve Divergence,one should have shorted when P/High formed.
So,how one should have traded? Long did not give profit.

Only my opinion
1) IMO it helps to check the overall trend first
2) Since it has been a downtrend, and also today was also going down so longs giving high probability trades based on OB> 5 bars is less.
3) Buying at dips after Oscillator staying at OB zone for more than 5 bars is high risk/quick trades stuff.
4) Finally no system is 100%
 

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