I was trying not to stick on one pair for my trading. I tried to look for any divergence signals on almost any pairs using my favorite indicator FXSniper's CCI. I will try to improve my self to recognize the divergence pattern and will learn to trade it every time. I use a trendline breakout to confirm the divergence and to open my position.
Here was the example of the divergence I spotted on USDCHF pair on June 13, 2013. I use H1 timeframe to trade but I always use the higher timeframes as the trend directions. I do not trade M15 or lower TF because there are many noise and false breakout on lower time frame. H1 is good for me.
On the chart above, price has made 2 significant low but the FXSniper CCI indicator made higher low. This conditions is known as divergence. When we spot divergence, we need to wait and confirm if the divergence has been completely formed. To confirm, I always use a trend line. On a bullish divergence as above, I always connect my highs. When price break this line, this mean that my resistant line is broken and by the theory, price will continue to move up.
As you can see, we can gain about 70 pips in a single trade in about 5 hours. Stop loss is placed on the previous low which is about 30 pips. So the ratio on this trade is 1:2. 1 for stop loss and 2 for the profit. I think it's a good trade.
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