Do you have any positive inputs @giovannicali? Else, go and play marbles my friend.
Dear Thelongestusernameyouwilleverfind,
It appears to me that you are a self taught aspiring trader. Your artistic painting reminiscences many hardcore trader in babypips. I believe many of us here would have one or two such beautiful art piece, perhaps some may still be painting as we speak. I would like to offer a few cents of my opinion.
Your idea of divergences are quite unique I would say. Normally, people use divergence to look for a reversal in trend, but yours is to look for confirmation of a trend. You term it as âHIDDENâ divergence. Interesting, I have never think along that line of thoughts. Furthermore, you combine a RSI spike with candlestick formation breakout for trend continuation confirmation as well.
From your masterpiece, I notice you adopt RSI = 9.
Hereâs the formula for RELATIVE STRENGTH INDEX
RSI = 100 â [100 / ( 1 + (Average of Upward Price Change / Average of Downward Price Change ) ) ]
Normally, an even number would be prefer for use with RSI. Otherwise, the RSI line may be skewed to either side depending on whichever side the price changes more. Nonetheless, iâm not saying you canât use an odd number. Maybe, skewing the RSI line may have its own merits depending on how you complement it with your own strategy.
Last but not least, some fruits for thoughts, if your stop loss is 5% of your Equity, just want to ask you what do you think would be a reasonable % for targets projection assuming you do one trade at a time?
This is a phenomenon, and a classic retail sector âsell tacticâ to those who really want a nice and easy picture to look at rather than a more boring black and white proven to be correct learning approach
âŚwhy is this? itâs because the retail sector on the whole canât be bothered to put in the effort, so as marketeers itâs only normal to choose what attract most of the fools; the easy approach that doesnât work.
Candle patterns are just daft, I can show twice as many that donât work as anyone who can show that they do work⌠just like divergence on a RSI or MACD - donât even get me started on the magic of Fibs.
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Hey @alphahavoc, thank you for your questions, Yes you are right, I learnt my trade in the pits, Ha ha. Aspiring trader? No sir, I have traded these markets for over 20 years. I was fortunate enough to choose aspiring winning ans loser traders. And the only winning traders I have met are the ones that went big at some stage, made a killing, and bought gamefarms, and sell big game for money. If you stay in the market long enough for 1 or 2% gains, your broker will go out of business and take your money with him!. But Please @alphahavoc, share your thoughts. I would really appreciate that? Let us all win!
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Wow, apologies with my previous reply Sir - I had no idea that you were in the Pits as an institutional trader.
5% risk on a trade⌠yea, youâve lost all credibility
Is that a direct quote from when youâre in the âPitsâ - sounds about right
Youâve had @LukasVisser and @LaughingCharlie both prove valid points, or rather floors in your opening statement, but fear not, your in the right place.
The school here is a good place for you to start.
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Correct! Big noise in the pits means big moves. no noise, low vols. Thats the way it is.
Correct, when the market breaks, you will have a hundred screaming jackets from opposing firms shouting in your face and they will psychological make you doubt. You have to be brave and feed the ducks that come sucking for food. Thats the way it is.
Fantastic. next time the market breaks, can you please tell us how far it will go? You should be a fortune teller! Please advise me on the next break, and if you can predict that move, wow, you will be on the morning money show, which I doubt! Ha ha.
Good joke! My challenge still stands, do you have a better trading system?" Ha ha, and now you will dissapear like a coward @BaconSandwich
I have passed the preschool, now I am a Forextrader, wow, in 2 MONTHS!
Ok thanks people, this is where I end my thread. I have given you my ideas, and I hope it will save just one trader from blowing his or her account. Please people, do not hang on to a losing trade, and never lose more than 5 % on any day. That is key. And if you do that, refund and practice again. Good luck everyone!
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Long, it was a good thread, you didnât get to post more about the reasoning why divergence has value, particularly it todayâs bot driven market, having skimmed read donât think that even raised itâd head.
Suppose now over to 1% risk brigade 
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Hey @peterma, you are a legend and nobody will argue with you! I think hidden divergence has value, especially in a bot driven market. Do you remember 1998, when everyoneâs computers told them to sell? Everyone and their Pentium 3s reacted to the same indicators! And the markets collapsed with no real reason, exept Greenspans comments, irrational exuberance! Hidden divergence is tricky, most people ignore it, and therefore one could be one step ahead of the bots? And when the bots reactâŚwow, payday!
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The Period you use for RSI @alphahavoc does not matter at all. Thank you for giving us the formula, which we knew, the only difference is that the peaks and troughs will be deeper. So, dont worry too much about the formula, look at the formations! I agree with Hidden divergence.
@alphahavoc, I see you do not know the difference between Hidden divergence, and Regular divergence. With normal divergence, you will trade against the trend, not a good idea, sometimes. Just quickly go back to the learning school on this awesome site, and make sure you understand Hidden divergence. There is a big difference! Good luck man!
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You might also be interested in taking it a step further and looking at Normal & hidden divergence between highly correlated currency pairs. Thereâs no real name for it, other than what it actually is, cross currency divergence. Thatâs where you can see potential breaks of a trend by overlaying two currencies on the same timeframe⌠just food for thought.
No indicator needed, the two price lines become the signal for divergence.
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I think he is in Babypips jail for a week or 2!
But you are right @BaconSandwich, although, the Euro, Gbp and Yen have gone in complete differents directions in the last month or two? I would rather stick to two currency pairs because there is no country risk involved, it is just pure price action. Many years ago the Swiss franc/ $ and Usd/ Jpy, went in one direction and the, Eur/usd and Gbp/ usd went the opposite way. they were mirror images of each other, but now times have changed?
I believe you tried to explain the best forex trading system that you found. But please make more simple explanation for your trading system and some example to buy or sellâŚthank you
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