Tips To Avoid Entry Too Fast Trading At Divergences (1)
Trading using divergence strategies can be very profitable. This divergence strategy is a great tool that is recommended to traders. However, there are times when you log in or do entry too early because you are not waiting for further confirmation.
If you continue to frequent the entry too early, you will continue to be hit by stop loss and slowly you will accumulate losses. And you know what happens when small losses accumulate, your funds or capital will end up bankrupt or MC. Your mind will be divided between the mind (MC) and your dwindling wealth capital.
Here are some tricks you can use so you have more confirmation that the divergence strategy will be your way and lead to victory.
Wait for the crossover indicator
Actually this is more of a trading rule for entry. Just wait for the momentum crossover indicator. This would indicate a potential shift in momentum from buy to sell or vice versa.
The reason is that you are waiting for the highest or lowest level and this can not be formed unless there is a crossover in the momentum indicator.
If the price chart shows higher highers, while momentum indicator such as stochastic, has reached lower highs then bearish divergence and you will surely be tempted to immediately enter the entry.
Until this state, you must be more patient in order to bear fruit. You have to wait for the momentum indicator you use to make a crossover. This is to confirm that the price graph is ready to reverse direction.
Not some time later, stochastic certainly makes the crossover. Playing a bearish divergence will definitely be a “pips collector”. Uuyeee ..
What’s the main point here? Ie Be patient. Do not try to precede this rule because you never know when the momentum will shift.
If you are impatient, you may just get burned when one trend continues to dominate!