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Complex trading system #3 (MACD Divergence)

Your Guide To The Stock Market.

Simple Forex strategies — simple to use, easy to try out.. This collection of Forex trading strategies and techniques is dedicated to help traders in their research and developing of . Divergence on Stochastic can be found the same way as on MACD. The reason for using both MACD and Stochastic is that one of the indicators can show divergence while .

6. Change in trend direction

The 34 Ema Trendline Break Swing Trading System Is An Effective Swing Trading Strategy in a trending Forex market. Its not a crossover system.

So if we think about going long or short which one we should consider? Both or opposite turning point? I hope explanation of my question is clear enough. English not my first language Thank you Dogan.

When there is a downtrend or range, a descending resistance is a better choice to go long. And visa versa for going short. Thank you for time to answer me. I hope this is not a silly question. When I want to go long as using line chart over the price level there are some turning points. I know old support and resistance turning to to each other. Do I need to consider all this turning points as resistance or just only clockwise?

Your candlestick explaination is simply superb, i have learned and practised in demo account and was successful. How can I change that and see exactely what I see in your charts? Hello Chris, thanks for sharing your knowledge and experience. Just a quick question about engulfing strategy, does it also work on weekly and monthly timeframes?

With my shortage of experience I think I will probably take 4 false signal because of many positive points. Too strong engulfing candle which is break BUB and engulf too many candles.

Abandoned baby candle above BUB before engulfing candle 3. There are signs of exhaustion and bears pressure. Consolidation for almost three weeks after 3 false signal, which I will consider like hesitation. Based on that market condition I will probably take this trade signal with riskier SL which is good and after being stopped out, continuation candle while gave me new signal to enter on trade.

It is formed by a too long candlestick with a considerable lower shadow. Indeed, it is not a false signal. It is a bad signal. Thank you so much Chris you are indeed a angel. I do have a question though. Please how can one use this strategies to trade shorter time frames like 5, 10, 15, 30 minutes also can this be applied to binary options?

You can use the same way on any time frame or price chart. Just keep in mind that shorter time frames are riskier to trade. Do you mean that, if the closing price of a candle is above an upper band, there is no band breakout? But the closing price of the third candle of the first example, it closed above the upper band, so how can it be a BB breakout?

Or were you doing simple technical analysis? Thank you very much. Oh sorry, english is not my first language. But, about the middle band, you said we can use it to trade continuation signals, but you also said that is risky or riskier than your normal trading. So, how can I trade continuation signals, if there are no strong reversal signals?

Thanks a lot for your time and help. You trade the strong candlestick patterns that for as continuation setups. The power of the candlestick pattern which is agreeable to the trend is important. What about the double bollinger bands? Everything about that system is explained here: Yeah, I read it all, and I think is the easier continuation signal? What do you think? Is the BB1 breakout, even realible for your sistem? My question is if a candle shadow break above the upper Bollinger, bullish or bearish candlestick, with out creating any pattern, how it can be explained.

It is just a strong price movement and deviation from the middle band. It means the related party is controlling the market strongly. When the shadow is too long, it means the opposite party is trying to take the control, but have not been successful yet.

Thanks Chris you always put the psychology of trading and traders in your articles which make them unique. For the first time in my life I can get a little feeling that I really understand how market works. I just need to read your articles more carefully and do some highlights. Your explanation of Bollinger bands in this article was awesome.

It means a big Bullish pressure is imposed to the market suddenly. What is happening Chris when the shadow occur above the candle? And the explanation is the same if the candle is Bearish? Basically do we have to follow the candles when breaking out the bollinger bands or the shadows are most important.

Hi Chris Once again i am surprised by your perfectly written Article. So many important sentences in this Article. Again your way of explaining the psychology of the market is so catching for me. Please start from here: The stock ex tcs has reached the upper band ,still it is bullish one or some reason like some profit booking in tcs can reduce the stock little lower or the index like Nifty is consolidating so tcs can lower so that days the False signal is formed.

If Nift is up or tcs has some gud news it will bounce back. If you short that time that will hit your stoploss. Then only we can short. Hello Dear Chris I am Learning too much From Your articles but i am new learner so i am in little confusion after reading the analysis of strong piercing line pattern article that you said in above paragraph 2.

Reversal trends 1st Paragraph how candle stick 1 and 2 make piercing line Pattern I mean in that pattern 1st candle is bearish and 2nd is bullish and close little below the 1st candle other wise it would be Bullish Engulfing….. Can you suggest me how the Bolinger band average period and candle stick time 5 min,10 min,30 min ,1 hour chart for intraday trading.

Now I use the Bolinger period average period as 12 days and 5 minutes candle chart for intraday trading in index. But some says the upper band is overbought area and lower band is oversold area. I though have one question; Is this Training based on long term period traders, 1 hour, 4 hour,1 day? It is hard to check one chart by one chart especially during working hours. Appreciate if you could consider, thanks, Chin. About the bollinger bands, I have one question. For example, we know that if the bands are too close, it means that the interest on buying and selling is low.

But, what does it mean, when one band is downward, while the other is upward? Market indecision and high volatily? If a chart is volatile and is trending down strongly, but the lower band points up, it is because, after an high volatily, the market is oversold, and will likely bounce up from close support level?

How do the bands relieve it? This occurs usually when the price starts taking a direction suddenly after a while of moving sideways.

After few candlesticks, both bands will follow the price direction. It was among one of the old articles of this site. I am now reviewing and editing them. I have added some more tips and delete the obsolete parts. I hope you are fine. Doji article is closed for comment,so I will ask you here.

As usual, thank you for an excellent article. You also said that 8 was confirmation for the 7 formation. What about the two candlesticks immediately following 7? One is a very small bodied bull candlestick followed by a large strong bodied bear candlestick that even breaks the Bollinger middle band. Why would you need 8 for confirmation when you have such a strong bearish engulfment pattern immediately following 7? Are there any negative points that would negate that bearish engulfment pattern?

Those small candlesticks are just 2 hours old candlesticks that were used to form on the platforms on Sunday afternoon on the daily chart. It was because of the broker sever time difference and market open on Sunday afternoon. They are not valid daily candlesticks. But sometimes is difficult to determine trend,because after strong trend the market is behaving strangely.

In chart below we had strong downtrend in previous structure. The angle is very steep, and after then we should wait for trend continuation setup,right. But after that the price is start to go up and down, up and down,and we did not have a clear trend. You had to wait for a trend continuation setup after the price went up. But such a setup never formed. As a result, you stay out.

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November 17, at December 1, at 2: December 28, at 3: March 13, at 1: March 12, at March 20, at April 7, at June 26, at 4: July 2, at 6: July 2, at 1: July 5, at July 16, at 2: August 15, at 2: August 15, at 3: August 15, at 9: August 26, at September 6, at September 13, at 2: September 14, at 4: September 14, at September 15, at 5: October 15, at 1: October 15, at 2: October 16, at 7: November 26, at 8: November 27, at 2: November 28, at 2: November 28, at November 29, at 6: November 29, at 3: November 29, at 7: November 30, at January 22, at 7: January 23, at 2: January 23, at 9: February 9, at 4: February 16, at 3: February 17, at 8: February 17, at 1: March 1, at 4: March 1, at 5: March 17, at 5: March 18, at 8: March 18, at April 15, at 8: April 15, at 2: April 15, at 3: April 16, at 3: May 3, at May 4, at 2: May 4, at 3: May 4, at 4: May 5, at 4: May 5, at 5: May 6, at 5: May 31, at June 1, at 2: August 2, at August 3, at 1: August 3, at August 10, at August 27, at 3: September 10, at 3: August 29, at 7: September 10, at 4: August 29, at 3: November 7, at 6: November 23, at 8: December 5, at 5: November 25, at 5: December 17, at 4: January 23, at March 20, at 2: May 18, at 7: May 18, at 8: July 12, at 7: September 18, at 4: September 18, at 6: This can be a short-term trading strategy but that all depends on the run the market makes.

Only you can determine the type of trader you are. These swing trading strategies are designed for you to experiment with and hopefully you will find one that sticks. It could be a trend trader or swing trader. Can you live through wild swings in the market? You can determine the long term trend simply by increasing your trading chart times such as daily — weekly long-term trend.

Four hour would be daily chart. Moving averages are generally used as an objective measure of trend. An up sloping trend line indicates an uptrend and the down sloping line is a down trend. We can also use the break of the moving average to determine trend. We are introducing the very popular technical analysis tool called a trend line. Trend line breaks are a very common trading strategy and we are going to utilize the trend line break as a way of showing a change of character in the market.

When a trend line breaks, traders look to position on the break or a retrace to test the backside of the trend line. We want to trade a break only if the trend line break happens in the same area as a break of the 34 EMA.

Is the 34 EMA crossed or not? Not much guesswork involved. The following is a daily chart of a Forex pair showing two buy setups. Shorts are the exact opposite. Stops and targets have not been plotted. The first trade setup is 1. A down sloping trend should not connect a lower peak if the low of that peak has not broken lower than the previous mechanical trend line drawing tip! Price does break above the trend line but takes 3 more candlesticks to break above the 34 EMA.

This trade did not run very far and I will show later that you would have still made a profit on it. I will show two methods to take your profit targets. Our second trade is 2. The last green circle is simply highlighting that the trend line still interacted with price weeks after it was drawn.

A huge candlestick takes out both the moving average and the trend line as indicated by the arrow. The stop loss is straight forward. You enter at the close of the valid candlestick the ones with the arrows and place your stop below the low of it.

Your stop loss will vary depending on the size of the candlestick that validates the setup. If the candlestick is much smaller than the candlesticks before it, you may opt to use a 2 or 3 bar stop instead of below the valid candlestick. This chart is showing where you would place your stop. If your stop lies just above or below for shorts a consolidation of price, you may decide to protect the stop below the cluster.

That will increase your stop size and reduce your position size so be warned. The chart also shows structural resistance price targets other wise known as support and resistance.

Those will depend on the overall trend of the market and how aggressive you want to be at these price points. This next chart shows a different way to take profits — Fibonacci extension levels As shown by the arrows, you draw a normal Fibonacci retracement level but you also have extension levels activated.

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May 6, at 5:

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Thanks Chris you always put the psychology of trading and traders in your articles which make them unique. Any More than 1 million more than 0.

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