I look for a divergence on my RSI chart (top right) and also another chart I use to verify has been Crude oil (CL) at 20 ticks (not shown in snapshot). The Cl has been leading the ES lately.
After both RSI and leading chart confirm reversal I'll enter at the first tick past hook point. I will then place my stop two ticks below the low pivot point. If you use 3 contracts your targets would be the mid-keltner line and the second target the upper keltner line (in this case since we are going long). The third can be used as a runner or you can set a target also as I did today at one of the major fib retracement levels.
There is another way to limit loses if the hook is far... get in right after the first bar reverses thereby having less risk in the trade.
I hope this gives you an insight. It is really very simple and basic.
The following user says Thank You to NMTrader for this post:
If you have time to start another thread, I'd love to see a new thread/discussion solely on trading divergences... it is something I've never been very good at.
Due to time constraints, please do not PM me if your question can be resolved or answered on the forum.
Need help? 1) Stop changing things. No new indicators, charts, or methods. Be consistent with what is in front of you first. 2) Start a journal and post to it daily with the trades you made to show your strengths and weaknesses. 3) Set goals for yourself to reach daily. Make them about how you trade, not how much money you make. 4) Accept responsibility for your actions. Stop looking elsewhere to explain away poor performance. 5) Where to start as a trader? Watch this webinar and read this thread for hundreds of questions and answers. 6) Help using the forum? Watch this video to learn general tips on using the site.
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Well I never thought It could happen but I traded all day and did not take a single trade! The surprising thing about it is that I feel great that I did not as I look back at the charts for today.
I have attached a couple of snapshots of my normal methodology that I trade and am now trading live exclusively. While I look at and trade the EOTPRO in sim to get a better feel for it and make a decision as to its usefulness for me.
Take a look...I have included comments on each.
Last edited by NMTrader; July 30th, 2009 at 04:36 PM.
The following 2 users say Thank You to NMTrader for this post:
Today's Journal was again short and sweet except that there was one trade for the day. I was spooked the rest of the day with the market since it was so jumpy at times and semi-narrow range to boot. So I feel fortunate in getting one winning trade out of todays market!!
Everyone have a great weekend and get rejuvinated and ready to trade next week...the start of a new month!!! Yep, August already....can ya believe it!!
Adios and Peace!!
Last edited by NMTrader; July 31st, 2009 at 09:42 PM.
Reason: cannot open trading journal docx