Hi everyone
I’m new here,my name is Arni
Which divergence carries more weight, exaggerated, regular, or hidden? or they’re all the same but become more important as they print on major S/R areas/zones?
Could you have foreseen that green candle with the question mark? it printed on1h when momentum on 4h was negative
Where would you have entered a short trade?
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In regards to divergence it is key to have it as one of many confluences. Once you do that you’ll be able to decide which suits you best.
I also want to know the answer.
let you know when I find it 
I’m not an expert but Line 1 disqualifies as a divergence because the candle close is below the reference candle. You’ve plotted lines between candle highs but the actual calculation of the RSI considers closed prices.
https://school.stockcharts.com/doku.php?id=technical_indicators:relative_strength_index_rsi
Both 2 and 3 would appear to be significant enough to consider as valid divergences.
Can’t say. Not familiar with the momentum indicator and personally would feel more comfortable understanding the price action before it, especially on higher time frames. As @CraigForex2020 mentioned I’d be more comfortable with more confluences.
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You may benefit from watching this
I don’t believe VP knows how to use the MACD tbh. He doesn’t know how to use the histogram and doesn’t talk about divergences at all.
Here are some excerpts from some well regarded books:
The New Trading for a Living, Alexander Elder
Technical Analysis of the Financial Markets, John Murphy
Technical Analysis: The Complete Resource for Financial Market Technicians, C Kirkpatrick & J Dahlquist
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Thanks darthdimsky, I use break of S/R, trend lines, chart pattern completions along with HTF momentum in the direction of my trade and RSI divergences but guess I can’t use divergences as buy or sell signals. what other confluences do you think I need to add to my tool belt? 
That’s perfect, what’s the most important confluence/s in your trades that you’d feel confident placing a trade after you’ve spotted them?
Can’t say to be honest. It really depends on your trading plan, your personality, risk tolerance, general outlook on trading & currency pairs you’re comfortable trading.
Personally I try and evaluate the MN, W1, D1 trends and try to build a analysis/forecast against each currency pair. On a daily basis I determine
- Trending pairs from previous day - based on using the ADX, 10/20/50/100/200 SMAs, and
- Ranging pairs - based again on ADX and Stochastics.
If the selected currencies line up with my analysis and forecasts I try to pick a really good entry on the H1 charts.
For confluences I use anything from candlestick patterns, price action (Al Brooks inspired), Fibs, Stoch divergences, chart patterns, etc. I am also watchful of trading hours (LON/TYO & LON/NYC overlaps especially), try to interpret economic & news releases to be mindful of how it’ll impact entries/exits for the day.
I’m not entirely happy with the way I’m trading still though. It’s still work in progress.
While I know how indicators like MACD/RSI work I haven’t used them enough to consider myself proficient. Atleast not to the extent recommended in the books and articles I read. Which is why I believe you should take your time to go through the various books out there and find what fits your toolbelt.
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Here’s a closer look at your chart. Remarks and channel lines in brown.
- Price established 3 higher highs (H1 - H3) in a clear ascending channel.
- H3 is a very large candle, indicating a possible climax/exhaustion bar. I’d want to observe the times on the X axis and tick volumes to determine if there were more indications to confirm this.
- Price does not retest the H3 level later and forms a Lower High (LH).
- Al Brooks claims prices range for approximately 10-bars after a climax and the 12th bar is the largest bar bull candle that breaks through the channel. I don’t believe everything Al Brooks claims/advocates (until I test it myself) but he’s very accurate in this instance atleast.
- Price fails to break channel on the push up.
- Develops an engulfing candle next, adding another confirmation to a downside break.
From all these observations, the RSI divergence included, it wouldn’t be unreasonable to place a sell stop below the engulfing candle.
Considering this is an H1 chart I might have a very strong reason to opt out of a sell and wait for the price to bottom out for a possible upward swing trade, especially if the sloping resistance on the left belongs to a descending triangle.Because the literature I’ve read indicates descending triangles (break-up) as profitable charting patterns.
If things had worked out as expected we both would’ve been correct going both short & long in this hyperthetical instance.
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Hi,
It doesn’t matter to me whether he (or I or anyone else) knows how to use the MACD. I have made an assumption that his track record as a Prop trader is not made up - that it has a basis of fact, and over four years he has an edge that more than fits my objectives.
I learned a long time ago that life is not about who is right and who is wrong, it is about whether objectives have been achieved by the intended course of action. I don’t predict either way. But for the purpose of the goals of my fourth serious attempt to demonstrate an edge in Forex trading (or stock or crypto), I have taken the decision to build a business plan based on the teachings of VP and follow his advice to the letter.
That may be a good or a bad decision, but I can assure you of one thing. It removes all doubt in my mind as to whether I need to worry about the 100 or more decisions I make from now on. The strategy is clear, the plan is well developed, and I now need to decide which two indicators I am going to use before backtesting. I have purposely left this in obeyance for a month (that may end up being two months) so I can come back to it and be sure it is what I want to continue spending a significant amount of time pursuing.
Meantime, I’m mining Chia - may live to regret it but at least it has updated my hardware and software skills a couple of decades. 
Then why recommend we learn from it and how did it fit the context of this thread? I don’t understand why you posted it then tbh.
I just want to put it out there that I didn’t attack you or him, if that’s how it was perceived. I, despite my own respect for Al Brooks work (and additional vouches from verified prop traders like Tom Hougaard) find inconsistencies in his books and am not happy he’s not able to apply a more statistical approach to his work, despite his BSc in Maths. Questioning and being critical of everything I read is something I just do.
I have nothing but respect and admiration for your posts. How genial you are and how you engage with people is something I hold in high regard. The reason I mention that is because I respectfully disagree with your assessment of Victor Patrick.
Quite a few of his “educational” videos on indicators and trading tools contain too many inconsistencies for me to believe he’s used them or knows how to use them. I had noticed this 2 years back when I’d watched him relentlessly bash the RSI indicator and more recently when I wanted to understand how the Ichimoku Kinko Hyo worked.
If he’s putting on the role of educating or teaching anyone he has to be responsible enough to demonstrate them, as they were intended by the creators of said tools or by the more established professionals in the industry. As a self proclaimed pro trader, in my eyes, he’s constantly failed to demonstrate a rudimentary functioning knowledge of what he puts out in his content.
Having said that, my personal dislike of Victor Patrick’s content does not mean I dislike the people who’ve found advantage and benefit in what he preaches. If it has led you to find your path in trading and better yourself as a trader/person then that’s wonderful and I genuinely mean it.
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Hi hi, Thanks a ton for mark ups, always learn more looking at an experienced trader’s analysis.
Thanks for the compliments but I’m a newbie myself tbh. Still a lot to learn and improve. 
Hello everybody,
I can’t help but think while I listen to some of the VP videos the similarities there is to ICT himself (in his voice and methods)
I would have been an old student of Ict here on babypips and he had some great stuff. It was a pity how it ended though. Does anyone else think the same?
Anyway best of luck to anyone that is having success with VPs methods.
Cheers
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Edited after publication - bold text on VP quotation
Hi,
This thread is very valuable to me. You took the time to read it and respond with criticism. I never take that negatively, so thank you. It is only when people with some knowledge disagree that a deeper level of understanding can be achieved.
What interested me about VP in the beginning is his attitude and approach. As I say, I have watched about 100 of his videos or podcasts (and have about another 60 to go). Like many who stumble across his ranting (teaching), I happened to start (if I am not mistaken) with the video about Big Banks. I knew about manipulation way back - I am a gold bug! But it seemed to me that VP was about to use that knowledge to form a strategy that could largely mitigate that fact to the trader’s advantage, so I paid attention.
I have two criticisms of the VP method. But these criticisms are also the reason I chose to spend countless tens of hours ensuring that I understood all of what I was supposed to understand from his work.
Criticism #1. His material is wholly unstructured, but when you come to his website and see the chronology of the material presented, I am not sure that makes sense either. So after about 20 videos, I decided to map out his podcasts and videos into a semblance of order. For simplicity, after some false starts, I decided just to watch them all in the order in which he created them.
Criticism #2. He can come across as somewhat condescending. I know from my own past work that this is sometimes how I appear to others when it comes to a subject for which I have great passion. I do not see this style myself when I am writing the text, but it’s good from time to time when others point that out to me. I try to keep emotional words out of my posts. Upon reflection, I can see why my opening line of “It doesn’t matter to me whether he (or I or anyone else) knows how to use the MACD.” could be seen as combative or condescending. It was not meant that way, so my apology if it came across that way. I am fully supportive of your response, and hope that members get a good deal of lessons from this discourse. Only by questioning what is written by others do we all move forward, even if at the time we do not see what the others are trying to point out.
On to the main point “how did it fit the context of this thread?”
When I do not understand what VP has said, I make a note in my “Terms of Reference” or ToR document that, when completed, will form my Forex Trading Strategy and Plan. As a person with a project management background, I can’t function without putting stuff in boxes and drawing the inter-relationship between the boxes. First I have a section that lists the titles of all his videos, podcasts or other material. All the links to those titles are recorded. For each title subject, I take summary notes after listening or watching. I also take note of when he refers to other publications of his (cross-referencing for deeper meaning). I now have a document (incomplete) that extends to 35,000 words. Often when I read a post on Babypips, I type in a few key words into my ToR and 90% of the time I am taken to one to five instances of that keyword in my ToR. From there I can simply refer to the link to the VP production, and watch it again - or parts of it, to consolidate my own belief that I can then use (hopefully) to provide some content to other forum members.
With specific regard to MACD, I used it a lot, and was dismissive of his dismissal of it as a tool. The bad thing (and at the same time the value) of the VP method is that it causes you to question WHY he is teaching what he is teaching.
That is a reason your response is valuable to me. I now have to go back over his content and answer your question. I do this to remind myself that I will not succeed in Forex unless I perpetually maintain initiative, discipline and patience.
This is what VP says in that MACD podcast.
For Longs
Make sure both lines are above the zero line, and have never gone below it since it last crossed itself.
Then, if they cross upward, go long.
For Shorts
Just do the opposite. Make sure the lines are below zero and wait for them to cross downward.
This Has Been A Gigantic Tip (Did You Catch It?)
I call these continuation trades, and you will hear me refer to them a lot in the future.
They are responsible for the biggest trades I have made in my career. Without them, I would have probably half the success I have now.
By itself, it may not have much meaning. But the method of delivery that VP has chosen is to take the reader slowly through a set of six major decisions that eventually form the basis for a complete plan that not only can be shown to be net positive in outcome (backtesting the strategy), but can be continuously improved upon or to be chosen ONLY in certain markets (long, short, choppy). It is this last piece that particularly fascinates me. I do not believe there is a strategy or plan that works in all markets. But that is by the by.
In context of all his other publications, the extract I have put in bold italics above is the most fundamental principle on which I have set my strategy for defining the zone. That means price action is moving in a way that may indicate a profitable entry. I then combine that with (edited) one indicator to determine the money at risk for the trade (the stop loss definition) and use two other indicators to know if and when to enter. The others of the six are about trade management and trade exit.
I hope this has fully answered your question, and thanks for taking the time to read my post. Having again reviewed my own ToR, that has helped me to consolidate that this is indeed a good use of the MACD indicator. This is also in the context that my strategy is in trend following not trend reversal.
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Not to mention that he sounds like Brian on Family Guy
I was thinking of ICT when I was writing too tbh. Although I wasn’t there when stuff hit the fan I was getting flagged with some of his comments while looking at a few of his videos. They both appear to have similar diva like personalities, though I believe VP has yet to blow up like this guy did:
I trawled through some of old threads and found that quite a few notable members tried to archive his stuff. So, even then there were a lot of folks who found them valuable. And it’s the camps for him and against him are really divided. I’m definitely going to go over his content after I read more of the Wyckoff method so I have some basis to relate/compare later.
Yea, I remember catching that bit at the time but I didn’t pay attention to him talking about the lines crossing over as much as I caught the zero cross. The moment he mentioned the the zero cross and say:(Did You Catch It?) it reminded me of the EMA cross that plays a huge part in his system (I believe it was a 20-EMA cross but I could be wrong).
I’m going to make a note of this for myself. I’m not familiar with this method and the conditions are very specific. I’m super curious to see how this works tbh and want to give it an unbiased shot.
Devil’s advocate of my own arguments/bias against VP’s content.
- My scope of knowledge is very limited. My knowledge of other markets and fundamentals are poor to non-existent. So I can’t comment on his most recent content on other markets
- My opinion is largely derived from how dismissive he is of indicators. I really liked his content on risk management and maybe even psychology. I can’t find a reason to dislike the content yet.
- Plus I last followed his content till Q2 2019 I think, so I don’t know if he’s changed his outlook over time, as I have.
I also subbed to his content after the big banks video and remember considering him as an authority of sorts because at that stage in time I knew nothing of FX and found myself wanting to tether myself to a base. So when he claimed to have tested 1000s of indicators I believed it till I started reading books on technical analysis, which is why I’m critical of them now. I get really riled up when I see him misrepresenting or omitting very obvious knowledge because I am a huge n00b still. I expect experts to know what I know and much, much more.
I found this fascinating too. I joined their discord channel and found it fascinating that there were ranks for folks who were coding for the 28 currency pairs. I don’t know if i can be done but there were people working diligently to factor the 6 components.
He’s inspired folks to work study market environments and work hard in fine tuning that system. I think that’s a wonderful thing because they’re obviously better off for it. So props to him for atleast being an enabler for folks like that.
On another note - Maybe you should open a thread in the lobby outlining the adventure you had upgrading your mining rig. Because I’m actually curious if you can slap on some old SATA 5400 rpm drives or whether you were forced to invest in more recent tech. (worth investing in PCIE Gen 4 NVME?)