Best Divergence Trading Strategy — Transcript

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1. 0:00i'm trying to get you into profit as
2. 0:02quickly as possible and the best way to
3. 0:04do that
4. 0:05again is trading with the trend and as
5. 0:08most of you guys
6. 0:09know a majority of my trade entrances
7. 0:12are because of divergences now in this
8. 0:15video i'm going to explain
9. 0:17hidden divergences as best as i possibly
10. 0:20can
11. 0:20because those are trend continuation
12. 0:25[Music]
13. 0:28divergences welcome back to the channel
14. 0:30everybody my name's artie and this
15. 0:32is the moving average a show where we
16. 0:34discuss everything day trading to keep
17. 0:36you profitable on a consistent basis
18. 0:38continuing along with the theme you guys
19. 0:40remember the video that i made on
20. 0:42thursday it was the five-minute scalping
21. 0:44strategy
22. 0:45and only trading with the trend this
23. 0:47video is going to be in addition to that
24. 0:50video so if you haven't seen it already
25. 0:52please go watch it after this one
26. 0:54but essentially i want you guys to
27. 0:55continue trading with the trend and the
28. 0:58best way to do that the best way to
29. 1:00actually get the
30. 1:01extra boost of confidence not only your
31. 1:04previous confluences to enter your trade
32. 1:06but looking for hidden bullish and
33. 1:08bearish divergences
34. 1:10i'm going to jump into the charts and
35. 1:11i'm gonna show you exactly how to find
36. 1:13those
37. 1:13all right so we're gonna be looking at
38. 1:15two different pairs two of my favorite
39. 1:17assets to trade i have australian dollar
40. 1:19us dollar as well as us 30. i've already
41. 1:23drawn up my support and resistance
42. 1:25levels on a one-hour time frame you guys
43. 1:27should constantly be doing this
44. 1:29every single time you jump on the charts
45. 1:31and all it is is drawing horizontal
46. 1:33lines across the peaks
47. 1:35and the lows you usually want two above
48. 1:38and two below the current price now let
49. 1:41me explain
50. 1:42quickly what a hidden divergence is if
51. 1:45you
52. 1:45think about standard bullish price
53. 1:47action and standard bullish structure
54. 1:50you're looking at
55. 1:51higher highs and higher lows now that is
56. 1:54going to be
57. 1:55your price action this is what the price
58. 1:57is doing
59. 1:58then you have to look at your oscillator
60. 2:02whether it is a stochastic rsi or a
61. 2:04standard rsi
62. 2:06some type of oscillator i like to use
63. 2:08the rsi and i'm going to show you that
64. 2:10here in just a moment
65. 2:12but with a hidden bullish divergence
66. 2:15because we're looking at bullish price
67. 2:17action
68. 2:18we should be looking for hidden bullish
69. 2:20divergences
70. 2:21now what your oscillator is going to
71. 2:22look like with a hidden bullish
72. 2:24divergence
73. 2:25is something like this so your price
74. 2:28action is making
75. 2:29higher highs and higher lows with a
76. 2:32hidden divergence your
77. 2:33oscillator is going to look something
78. 2:35like this it's going to create a high
79. 2:37a low a higher high and this
80. 2:40low is going to be lower than the
81. 2:42previous one you can clearly see that
82. 2:45this low and this low good structure
83. 2:48but on the rsi you had a low and a lower
84. 2:51low
85. 2:52this is important because at this point
86. 2:54the market was
87. 2:55oversold and went up and at this point
88. 2:59the market was more oversold
89. 3:02and went up this is going to be your
90. 3:05hidden
91. 3:05divergence and you can put trend lines
92. 3:08up to see it
93. 3:09clearly when you get something like that
94. 3:12this right here is a
95. 3:13great entry point especially if price
96. 3:16action is on a trend line now for hidden
97. 3:18bearish divergences
98. 3:20it's the exact opposite so literally
99. 3:22just flip it okay so because we've
100. 3:23already done an example of a hidden
101. 3:26bullish divergence let's look for one on
102. 3:28the price
103. 3:29we're going to be looking at this
104. 3:30section right here you can clearly see
105. 3:32we are in an uptrend
106. 3:34we have our low our higher low our
107. 3:36higher low
108. 3:37higher low higher low now let's toss up
109. 3:39the moving average rsi on here
110. 3:42it's called the tma divergence indicator
111. 3:44it's basically an
112. 3:46rsi without the overbought and oversold
113. 3:48areas
114. 3:49so i've got a few of the settings turned
115. 3:51off just so i can show you what the rsi
116. 3:53looks like it is a solid yellow line
117. 3:55showing momentum because the rsi is a
118. 3:58momentum indicator it shows you which
119. 4:00direction the price is going you can see
120. 4:01if the rsi
121. 4:02is going up we have bullish momentum
122. 4:04above the 50 line
123. 4:06that means it's going to continue up
124. 4:08going down below the 50 line that means
125. 4:10it's going to continue down but the cool
126. 4:11thing about the rsi divergence indicator
127. 4:13is
128. 4:14you can actually plot bullish and
129. 4:16bearish divergences the normal ones
130. 4:18as well as hidden bullish and hidden
131. 4:20bearish divergences
132. 4:22so because we're only looking for
133. 4:24bullish hidden divergences
134. 4:26we're going to tick that and see what
135. 4:28happens and just like that we're getting
136. 4:30higher lows
137. 4:30on the rsi and then we get that big dip
138. 4:34down creating a more oversold market and
139. 4:37then the price starts going up
140. 4:38right there you get your hidden bullish
141. 4:40divergence and because you've already
142. 4:42marked up your structure
143. 4:43after that candle closed right there you
144. 4:46could have
145. 4:47entered in your trade with your first
146. 4:49take profit
147. 4:50at that previous level of support and
148. 4:53resistance and your second take profit
149. 4:55at the next one keeping your stop loss
150. 4:57below the bottom of that candle
151. 4:59you're looking at a one to three risk to
152. 5:01reward ratio right here with a total
153. 5:03profit of 46 pips
154. 5:05on this one move so not only taking into
155. 5:07consideration
156. 5:08all of the things that i taught you in
157. 5:10the previous video on how to trade with
158. 5:12the trend
159. 5:13off of trend lines using all of the
160. 5:15tools that you have at your disposal
161. 5:17you can also set specific parameters for
162. 5:20which divergences you're looking for
163. 5:22right here now because we are going on a
164. 5:25long position
165. 5:26and we're targeting two previous support
166. 5:28and resistance levels
167. 5:30you want to look for reasons to get out
168. 5:32of the trade at that point
169. 5:34not only is it your take profit if
170. 5:36you're holding trades long term with a
171. 5:38trailing stop loss
172. 5:40this next tip is going to help you get
173. 5:43out of your trade before it starts
174. 5:44coming back down
175. 5:45so when looking at divergences there are
176. 5:48regular divergences
177. 5:50if the price is creating higher highs
178. 5:52consistently
179. 5:53and then the rsi is going to start
180. 5:55creating lower highs
181. 5:57that is a regular divergence so what you
182. 5:59can do is go into the settings
183. 6:01and only look for bearish divergences
184. 6:04because that's going to be your
185. 6:05exit point for your trade and right here
186. 6:07we got a
187. 6:08higher high in the price and yet we got
188. 6:11a lower high on the rsi giving us our
189. 6:14first bearish divergence
190. 6:15which means that this would have been a
191. 6:16good exit point for your trade
192. 6:19because it is not only a previous level
193. 6:21of support and resistance but because
194. 6:23you got that bearish divergence
195. 6:25this is how i want you guys to be
196. 6:26trading trading with the trend
197. 6:28looking for hidden divergences trend
198. 6:30continuation divergences
199. 6:32targeting previous levels of support and
200. 6:35resistance
201. 6:35these should be your zones because these
202. 6:37zones are magnets
203. 6:39for the price and if you guys want to
204. 6:42see how i trade
205. 6:43day in and day out whether the price is
206. 6:46going up whether the price is going down
207. 6:48if i'm trading with the trend or if i'm
208. 6:50counter trend trading doing scalping
209. 6:52you can see all of that information
210. 6:54right here in this video
211. 6:56and if you guys enjoyed this video and
212. 6:57you got some value out of it and you
213. 6:59like the way that i teach consider
214. 7:00subscribing to the channel by clicking
215. 7:02this button
216. 7:03right here thanks so much for watching
217. 7:04and we will see you in tomorrow's live
218. 7:06stream
219. 7:08stupid eyebrows literally in my eyeball