"Take Risks: If you win, you will be happy; if you lose, you will be wise. Nothing ventured, nothing gained."

Thursday, November 12, 2009

Regular Bearish Divergence on Eur/Usd

I have always wanted to get a chance to write on this ever since I read Divergence Trading from Keong Hee's Book (found on the recommended book links on the right) and Babypips.com. It ain't a huge reap last night, but I'm glad to turns out fine. This signal doesn't appear often, and although I have always taken note of such divergence but it rarely happens, at least to me.

After my darn exam (first paper) last night, came home to see Eur/Usd pushing up to 1.5030+ level. Seems resistance are pretty strong at whenever they push thru' the price of 1.5000. Ever watch the movie Troy? Its like the Greeks who are pushing hard through the frontline of the Troy army, but are always being strongly resisted by the archers of Troy. Who knows what will happen next? Maybe Euro will make a wooden horse and Usd will keep it and then there goes their resistance at 1.5000.

Check out the Blue trend line I drawn between the two vertical Red line. Top of the price candle and top of Stochastic Oscillator. Price is make making a Higher High (HH), and the oscillator is making a Lower High (LH), this is a signal of a regular bearish divergence. It indicate the Bulls are exhausted, warning of a possible trend change in direction. Well, thanks to babypips's Divergence Trading Cheat Sheet I printed out for reference.

Take profit off 33 pips at 1.5000, in case of price rebound at triple zeros level as I went to bed with the trades open. Hope some of these strategies made from me and Bottle's trades serve you at times, we are opened to discussion if there is anything that needs improvements / add-ons. =)


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