Jump to content

Recommended Posts

Although there was divergence , price was above the MAs - its difficult to call tops & bottoms just with divergence, but you're right to say it can be an early "warning " signal. You wont know of the divergence until after the event , so if using it,  you have to "anticipate" it in my opinion. Another way to use stuff is if the indicator that diverged , then breaks the divergence trend , like this example. I hope I have made myself clear, sorry if I haven't

Capture div.PNG

Link to comment

You are correct @Nelsy-Boy, divergence isn't a signal it's a sign. Decreasing divergence is saying that the latter part of the trend does not have the same force as the earlier part, this is not unusual but may point to a collapse in the near future.

Looking at your Ichi 1 hour chart price is above Tenkan and Kijun and Cloud so that's firmly short term up trend.

The daily Ichi price has gone up through Tenkan and Kijun and gone through the nearside and farside boundarys of the cloud  (even on the default settings) so the long term is now bullish as well (none of the 4 levels of resistance held). If you had extended the view further right you can see the cloud boundarys have just crossed.

1840156334_USTech100_20190118_18_08.thumb.png.3a7941e4fc0cffbde6e0e0e28ccbcb7e.png

Link to comment

Thanks @Caseynotes. I find the momentum indicator off putting at times. The daily says look for an entry point to go long which I did do on demo on the close of the first red candle after exiting the cloud. After todays upward movement in price, the momentum indicator is angled down. How should I read that? Any ideas?583901864_USTech100_20190118_15_55.thumb.png.772248a40536bbb4bfdb5f736022c32e.png

Link to comment

@Nelsy-Boy, more force is needed to reverse a trend than to continue one so look to the context of the price action. Also look at the size of the candles, large candles rightly skewer momo higher but no trend can keep laying big candles down continuously so expect momo to drop away. 

For example after a spike momentum always drops away even though price is continuing higher so always look for a reason.

Divergence is better read as a signal latter on in a trend where price is flattening and momentum is falling and trader enthusiasm is waning so look for it in an older trend rather than a new one. 

  • Like 1
Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      21,249
    • Total Posts
      90,855
    • Total Members
      41,352
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    Aliashiq
    Joined 03/02/23 17:38
  • Posts

    • Hi @Mark12 If you are trading shares, you will have the option to place a limit order to sell your existing position. When the market opens, please check if your order level is close to where the market is trading. All the best, OfentseIG
    • We have to wait until Friday to find out if the UK economy skirted a recession.   Richard Snow, foreign exchange analyst at Daily FX, tells IGTV’s Jeremy Naylor that after the third quarter contraction of 0.3%, there is a risk around the incoming data for the fourth quarter. Here he discusses GBP/USD as a trade to go short. But what if GDP comes in slightly higher? Richard says that is likely to be largely academic and that he believes the short trade will prevail. Jeremy Naylor | Writer, London | Publication date: Friday 03 February 2023
    • Breaking News - US NFPs Surge to 517k vs 185k Expectations, Unemployment Rate Falls to 3.4% Feb 3, 2023 | DailyFX Nick Cawley, Senior Strategist Source: Bloomberg   US DOLLAR (DXY) PRICE AND CHART ANALYSIS US NFPs smash expectations in January. US dollar picks up a bid. Total nonfarm payroll employment increased by 517k in January, and the unemployment rate fell to 3.4% according to the US Bureau of Labor Statistics. Hourly earnings also beat expectations. Last month’s NFP figure was also revised higher from 223k to 260k. ‘ Job growth was widespread in January, led by gains in leisure and hospitality, professional and business services, and health care. Employment also increased in government, partially reflecting the return of workers from a strike.’     The Federal Reserve hiked interest rates by 25 basis points at this Wednesday's FOMC meeting, a move fully expected, and priced in by the market. Fed chair Powell, while continuing to stress that further rises are data dependent, added a new word to his FOMC vocabulary, disinflation, sending the US dollar lower and risk markets sharply higher. Powell said that it is a ‘good thing that disinflation so far has not come at expense of labor market’, adding that ‘this disinflationary period is in early stages’. While chair Powell will still keep tightening monetary policy to break the back of inflation, financial markets are now pricing in just one more 25bp rate hike at the March meeting before a pause in Q2 and Q3, while rate cuts are now seen in Q4. FOMC Hikes Rates 25 bps as Expected, Leaves Open Further Hike Expectations The US dollar (DXY) picked up a bid post-release rising around 60 cents to 101.90 US DOLLAR (DXY) DAILY PRICE CHART – FEBRUARY 3, 2023     What is your view on the US Dollar – bullish or bearish?
×
×
  • Create New...