Trend lines, Support and Resistance

[4xStar]

Take a look at this webpage there are some good ebooks,

Forex Books for Beginners, Download Free Forex E-Books

look at "Hidden Divergence � by Barbara Star, Ph.D.“
also
"Reverse Divergences And Momentum � by Martin J. Pring.”

Thanks for the link, I know there are a million books to read but I am lazy I was just wondering if someone knew divergence the way Tymen, for example, knows candlesticks and could give some examples in real time so we can see it as it is occurring. I know what it is, and have seen numerous chart examples of it, but I still have a problem recognizing it as it occurs.

[daydreamer65]

million books to read but I am lazy

Well best of luck with that. :lmao:

[kagein]

@4xStar

Is there a thread anywhere that teaches divergence … it is something that I still have a hard time wrapping my mind around. Or if now, maybe someone who understands it well could start one?

Ok heres an example of divergence i took this morning, still in this trade, im targeting 205.75-206.00 but will bail out on the signal of a powerful reversal candle. Divergence trading with the Inside bar as your trigger can be very profitable this trade is up 4R already for me. On average most divergence /IB trades ive taken around a S/R level have reached at least 2R. Theres loads of examples on the Alternative template thread.

I would suggest going over your chart and plotting them, once you get the hang of it, they arent to hard to spot.

[Piphacker]

[B]Maybe this may help anyone in lower timeframes. Visit My threads post No#538
http://forums.babypips.com/forextown/11844-piphackers-trading-jounral.html
PipHacker!!! [/B]

[dobro]

Hey ‘akeakamai’ 'buddy ‘ol pal’.

Long time no hear!!!

OK: I don’t want to start a discussion on Stochs here (and yes by this time I reckon I can spot ‘good’ divergences). Let’s agree to disagree shall we. I only trade the daily timeframes and longer so it would be counter productive for me to sit and wait for ‘good’ divergences using Stochs i.e. not enough trades for me. Differents styles but if Stochs works for you then great. Put it THIS way: if you’re ONLY trading the divergences then good and well BUT if you pick up ANY trading manual the ‘common’ belief is that when Stochs are in overbought territory then it’s time to sell and visa versa (yes wait for the lines to cross blah blah blah). Like I said: Stochs for USD/CAD were in oversold territory for a YEAR aside from the odd ‘blip’ up (OK I’m exaggerating but you get what I’m trying to say). Now I just KNOW that some people (not me BY THE WAY) would have looked at Stochs and bought and ended up waiting for the price to turn and believe me it would have been a very expensive wait!!! (There is EVEN a ‘system’ somewhere on this site that would have you keep buying every day as long as Stochs were in oversold territory and hold on to the positions until Stochs turned and went into overbought territory. I can assure that had you traded that ‘system’ on USD/CAD last year you’d either have wiped out account after account OR you would have needed LOADS of $$$ to KEEP ‘propping’ the account up and even THEN you would probably not have made a profit in the end because of the interest that you would have been paying). Just my opinion based on what I see is all and a warning to anyone else i.e. make sure that you UNDERSTAND whatever indicator you choose to use i.e. just ‘plonking’ an indicator on a chart based on these ‘one liner instructions’ that normally accompany most indicators (especially on the Internet) is a recipe for disaster!!! (By the way: if I’m looking for ‘good’ divergences I’ll stick with Wilder’s RSI thank you very much)!!!

D. - I think you are referring to Topchess who advocated to keep buying shorts when overbought as eventually the pr will go down. You correctly pointed out the problems with such a strategy. His TF couldn’t have been more than Daily as Oanda (my broker) doesn’t chart longer than Daily. I tried it on demo and the weekends were sleepless as I watch a pr go deeper and deeper into OB or OS - eventually I would get +pips but too stressful. It works if your nerves can take it 7 you have a current Valium rx. d.

[dpaterso]

Hey,

Nice to hear from you again as well!!!

Where IS everybody (from last year)???

Anyway: I hope things are good with you.

[akeakamai]

Hey ‘akeakamai’ 'buddy ‘ol pal’.

Long time no hear!!!

OK: I don’t want to start a discussion on Stochs here (and yes by this time I reckon I can spot ‘good’ divergences). Let’s agree to disagree shall we. I only trade the daily timeframes and longer so it would be counter productive for me to sit and wait for ‘good’ divergences using Stochs i.e. not enough trades for me. Differents styles but if Stochs works for you then great. Put it THIS way: if you’re ONLY trading the divergences then good and well BUT if you pick up ANY trading manual the ‘common’ belief is that when Stochs are in overbought territory then it’s time to sell and visa versa (yes wait for the lines to cross blah blah blah). Like I said: Stochs for USD/CAD were in oversold territory for a YEAR aside from the odd ‘blip’ up (OK I’m exaggerating but you get what I’m trying to say). Now I just KNOW that some people (not me BY THE WAY) would have looked at Stochs and bought and ended up waiting for the price to turn and believe me it would have been a very expensive wait!!! (There is EVEN a ‘system’ somewhere on this site that would have you keep buying every day as long as Stochs were in oversold territory and hold on to the positions until Stochs turned and went into overbought territory. I can assure that had you traded that ‘system’ on USD/CAD last year you’d either have wiped out account after account OR you would have needed LOADS of $$$ to KEEP ‘propping’ the account up and even THEN you would probably not have made a profit in the end because of the interest that you would have been paying). Just my opinion based on what I see is all and a warning to anyone else i.e. make sure that you UNDERSTAND whatever indicator you choose to use i.e. just ‘plonking’ an indicator on a chart based on these ‘one liner instructions’ that normally accompany most indicators (especially on the Internet) is a recipe for disaster!!! (By the way: if I’m looking for ‘good’ divergences I’ll stick with Wilder’s RSI thank you very much)!!!

Oh, I agree that stochs used “conventionally” are pretty useless, but I don’t want the general populace walking away thinking they are meant for the garbage! Sounds like you are doing better now, I am too over here. Good things come to the patient ones!

[medisoft]

How many higher highs and higher lows in a row do you consider a “series”? 2? 3? Thanks

[jakeroberts]

S & R can be confirmed by double stochastic. If you want to plot your own lines, then you should look at the stochastic. Preferably the higher time of stochastic as they are they only ones to show reliability

[DanielFxTradingCircle]

Here is an example of a real trade im in:

The EURGBP has broken below its major support level as indicated in the red line.

In the long term the price has been consolidating since the high of 0.98012 in November 2008. And has broken its key support around the 0.82220 zone. This whole consolidation pattern is bearish in nature due to it lower highs and it forms a descending triangle which is also bearish in nature.

EURGBP in a medium term down trend that started July 2011 at 0.90612. In the medium term there has been a a lot of lower highs and lower lows. There is also a not so perfect ascending triangle which is bullish in nature that had a breakout but stalled at 0.85045. This bullish ascending triangle has been broken to the downside enforcing that the bears are still winning. The moving averages are all showing momentum to the downside and the MACD just had a crossover on the weekly chart. Everything is pointing to the downside.

The recent break of the major psychological support level was an entry point. It is a major support level since it stands out and is very obvious. This means that other traders would also be look at this key support level so when it broke it broke out in increased volume showing selling preasure at that support level. This should pave the way to where my profit target is. I will be watching out for major pull backs that might give enough evidence to suggest the market has turned against me.

Old chart

Up to date

[AlchemistX]

Okay, you’ve got trend lines and horizontal S/R lines drawn on your chart.

Using an uptrend as an example:

1. look for price to pull back to the trendline, which acts as support
2. price will often then reverse and continue in the direction of the trend
3. look for horizontal support in addition to the trend line, as this will increase the likelihood of this happening
4. consider using Fibonacci levels for a greater degree of confirmation - I like to see price retrace to the area between the 38.2 and the 61.8
5. Use candle/bar formations for entries

[wealthykingrich]

Another way to look at S/R.

The highest/lowest highs/lows over the last 5, 10, 20 and 40 bars.[/QUOTE]

How can i get this indicator?Can you please help me to get this indicator.
I will be looking forward to you e-mail soon.
Thanks.
Richard.