Which Indicator is the Worst for Trading Divergences?

Both you and tonkadad are incorrect.

The OP does not know how logi theory works (Carnap).

 

Well it's a good thing then that your opinion is worthless to me yet my broker statements, which mean a great deal to me, absolutely agree.

 

So, you are going to choose money over Jack. You had better be dam sure of what you are doing.

 

Meant, my broker statements agree with what we discussed about the trend.

I typically ignore Jack, he is a twisted person and is better left alone or ignored.

 

Sorry, was said with a large dollop of sarcasm. I should learn to use the smiley faces. I assume everyone is as sarcastic as I am.

Yeah the whole Jack thing, in another thread he was getting a little to Forrest Gumpish for me. I am still waiting to hear how he invented
the combustion engine.

 

I dont understand why one would want to know which is the worst for trading divergences. Wouldnt one want to know which indicator is the best for trading divergences?

I use the MACD. It incorporates 2 moving averages of different lengths. When divergence ends and convergence begins, this is the beginning of the overlap of trends. The overlap of a down trend to an uptrend or uptrend to a downtrend. As the overlap begins, congestion sets in, so you can trade the lateral trend that is the overlap and get situated for the ensuing change of trend. Then when Divergence of the MACD occurs, the trend has changed.

Many strategies can be used with this information.

 

I trade in some fashion divergences each day on one minute ES but unlike most, I am not using any indicator. You study enough of what causes divergences, don't need an indicator. Most use highs/lows when they compare, I use closes. So when I see more of clustering of closes, then most likely market will turn.

I think MACD divergences work better on higher timeframes like dailies or weeklies, but much less so on one minute bars. Days like today in ES, you can go broke trading divergences, today better to wait for RSI pullbacks below 50, then when RSI hits 70/30, trail the lows/highs of the bars that just completed.

I trade divergences often based on loss of volume, like an uptrend, and I check pullbacks and volume decreasing, I take larger position.

Test anything out first so you know all the answers before the questions.

 

I think MACD is the worst indicator for trading divergences.

 

ALL indicators are bad for trading divergence.

Use chart pattern, price action for trading divergence.

 

I think most have not studied divergences long enough to be able to utilize them. I am more interested in angles of steepness in how they formed and not just lower indicator readings and high prices. But I done back tests of bearish divergences are different than bullish, number of bars to form various patterns within the indicator that have proven for me to have less losing trades. Reverse divergences via chart reading are often defined as a new trend has started, it is one of my rules when not to take new trend trade and play the Reverse Divergence signal.

Trading well though is consistency and risk management, as risk only entity one can control 99% of the time.