100% MOST ACCURATE Forex Entry Point | Divergence Stochastic Trading Strategy
the fifth signal was hidden divergence the price was making higher lows but the indicator was making lower lows hidden divergence as you can see we ignored all the signals offered by the differences on the upper side of the stochastic as we are in a strong upward trend we ignored all the signals offered by the divergences on the upper side of the stochastic [Music] hydrators this is budi verstio president and ceo bpp asset management and if you stick with me for a few minutes i will share with you a simple and easy swing trading strategy that will improve your trading results the core of this system relies on differences between price actions price and the stochastic indicator in the direction of the prevailing trend on the market indicated by exponential moving average 200 exponential moving average let's dive right into this strategy and see how it worked here is the first rule of the strategy we need to spot divergences between the price and the stock sd if you are a trendsetter differences should be one of your most important tools because the divergent signals momentum coming into the mind trend suggesting a possible continuation in the prevailing direction of trends continuation as you probably know there are two types of divergences one regular divergence and hidden divergence regular divergence involves higher high price higher high prices and lower indicators higher higher prices and lower indicator values during an uptrend and lower low prices and higher indicator values during a downtrend when this happens that's an indication of market exhaustion a possible sign of market reversal or at least a short-term correction a hidden diversion signals a continuation smooth in the direction of the prefiling trend that's why if you prefer to take positions in the direction of the mind trend of the hidden divergence can generate some pretty accurate signals for spotting differences you can use many tools but i prefer to use the stochastic indicator stochastic indicator rejecting eight three three four or one hours four hours and daily time frame now here is the key to our system we don't treat all the different tendencies we don't treat all the differences it's very important during strong trend the stochastic will generate divergence after divergence and most of the signals will probably fail you look at this gbp usd chart and as you can see the price was in a strong upward trend and stochastic indicator generate several different agencies but most of the signals were files false die for chances that's our wrong approach in what concern threading the divergences we have to be smart and filter this technique in order to eliminate file signals file signals divergency now here is the second rule of this strategy we'll establish the main trend with 200 period exponential moving average and we only trade divergences in the direction of the trend buy only by bye bye also we only trade on the hourly or four hour on on a daily timeframe in order to reduce the market noise and filter the bet signal generated on shorter time frame here is how it takes signals with the swing threading setup [Music] here is how it takes signals with this swing trading setup when the price trades above the 200 exponential moving average we consider taking only long entries long entries bye bye bye long long long entries long entries when the price trades below the 200 exponential moving average we consider taking only short entries only short entries we search for divergences between the stochastic indicator and the price only in the direction of mine trend indicated by the 200 exponential moving average if the price trades above the 200 exponential moving average we search for the efficiency on the lower side of the stochastic on the lower side of the stochastic and if the price trades below the to 100 exponential moving average we search for divergences on the upper side of the stochastic here is the gpp usd on the one hour time frames we determine the upward trend with the 200 exponential moving average and we start searching for divergences on the lower side of the indicator stochastic indicate and with only consider to go along on the market the first signal was dubai entry after a hidden divergence around 200 exponential moving average the price was making higher loss but the indicator was making lower lows and the second signal was the by entry after a hidden divergence also around 200 exponential moving average see how the price is making higher loss higher loss but stochastic indicator makes lower lush a second signal the third opportunity was generated after a hidden divergence also around the same 200 exponential moving average this is third opportunity a hidden divergence and then the fourth signal was classic divergence if we do and the chart we see the price making lower lows but the stochastic making higher lows classic divergent the fifth signal was hidden divergence the price was making higher lows but the indicator was making lower lows hidden divergence as you can see we ignored all the signals offered by the differences on the upper side of the stochastic as we are in a strong upward trend we ignored all the signals offered by the differences on the upper side of the stogastic now let's look at this gpp usd chart also on the one hour's time frame we established the downward trend with 200 exponential moving average and we start searching for divergences on the upper side of the indicator this time one hour time frame the first signal was a short entry after hidden divergence surprise was making lower highs but the stochastic was making higher highs this is hidden divergence the second entry was a sell signal after a classic divergence see how the price is making higher highs higher highs but the indicator is making lower highs the third opportunity was hidden divergence around 200 exponential lower highs higher highs cell as you can see we ignored all the signals offered by divergences on the lower side on the lower side of the stochastic as we are in a strong downtrend the trick of the strategy is to determine the main trend with the 200 exponential moving average and only take position in the direction of the trend sell only we don't taste all the divergences that occur on the chart we only treat the ones with a higher probability meaning the ones in the direction of the mayan trend if you are trained following trader you should train your eyes to spot the differences on different charts please keep in mind that this system is more reliable when you are using higher time frame one hour for or daily a signal that is produced on the one hour for hours or on the entire chart is more reliable than a signal produced on the five minutes or 15 minute chart but divergence is more reliable on higher time frames because the market does not move as fast and is easier to define trend by using higher time frames you will see the pattern developing and you will have time to make the correct decisions test this strategy on your charts and i look forward to hearing from you in the comment section about your result if you got any value from this video please consider subscribing to this channel and give us a as it would help us to grow our channel in the future see you next time
2021-01-05 01:46
