Macd divergence, stochastic and pivot lines

[Austorious]

The purpose of this thread is to help each other in minimising risk while maximising pips trading macd divergence and stochastic,while pivot line serve as a map.if you feel you have better understanding or poor understanding,than this thread is for you.

[Austorious]

Life in itself is a learning process.The only way to learn is to interact with one another.

[AutoTrader]

MACD Divergence is one of the most subjective and ineffective trading methods.. It cannot be tested objectively and its results are at best - mixed. Divergences in general are a very questionable issue in trading, they are also hard to trade well.

Pivot lines are better, though most of the profitable traders I know simply ignore them as most of the time they are practically powerless.

[Austorious]

Originally Posted by AutoTrader

MACD Divergence is one of the most subjective and ineffective trading methods.. It cannot be tested objectively and its results are at best - mixed. Divergences in general are a very questionable issue in trading, they are also hard to trade well.

Pivot lines are better, though most of the profitable traders I know simply ignore them as most of the time they are practically powerless.

like we know,no one indicator can stand alone without comfimation from other indicators.i think macd divergence is a good tool with a combination with stochastic,that is during a negative divergence,sell the rallies of the stochastic,while during a positive div. Buy the valley of the stochastic.so with this combination,the probability is high.

[Austorious]

Macd divergence serves as am early potential signal that a loss of momentum and a potential price reversal may be in the making. You should look at the macd histogram and price action on the currency chart. Suppose you want to detect a trend reversal breakout,you can identify it through the macd divergence signals.During an uptrend when price makes a higher high,macd histogram makes a lower high.this is called Negative bearish divergence and signal of a potential reversal to the downside is in the making. The signal in an uptrend is alert when price makes a lower low and macd histogram makes a higher low.this is called positive/classical bullish divergence. Pls note that when you detect a trend reversal breakout through macd divergence,always use stochastic as comfimation of last resort. My trade method is this,i always look at 1hr chart for divergence and use 15min chart as entry point and exit my position when stochastic is at the peak or valley.Or i site a divergence on the 4hr chart,and use 1hr as an entry point.Target Profit:use your pivot lines to take profit.Exit rule:if you are holding a buy position,close your position when stochastic is at the peak or pivot is at R2 or R3.this is known as area of overbought.. while holding a position in a downtrend,exit your position when stochastic form a valley,or check your pivot if price is at S2 or S3 know as oversold region. Remember that a simple system brings in decent profit and you can make a living trading the macd divergence alongside stochastic.hope its help?