I Tested Divergences - Do They Actually Make Money?

Divergences. One of the most used trading techniques in the game. Dominating the trading game with highly effective indications of momentum changes in the market, but does it actually make money?

In this video, I spent 30 hours researching everything there is to know about Divergences. The results were pretty surprising...Enjoy!

If you learned something new, leave a like!

Follow TradingLab:
===============================

*None of this is meant to be construed as investment advice, it's for entertainment purposes only. The links above include affiliate commissions or referrals. I'm part of an affiliate network and I receive compensation from partnering websites. The video is accurate as of the posting date but may not be accurate in the future.

[Legacylanes_moto]

I trade divergences, and they do work. 90% of the times. But you need to know a little bit of price action like support resistance, trend lines. Candlesticks and chart patterns. Where they occur is important.

[jove]

Only 10k views and really golden info in this video I'm blown away

[jd]

1:03 is not the only type of divergence. You also have other divergences: market triads (ZF, ZN, ZB or NQ, ES, YM) intermarket relationships (USD, EUR, GBP or USD, Bonds, Futures) and divergences between futures contracts (NQM vs NQU, for example). It's not necessary to have an indicator or to use volume vs price, but you can, of course. I think to prove they actually work (meaning they filter some type of trade) means you have to build a confusion matrix and actually show that you have, by using the divergence, increased your profit for a strategy by only taking trades that have a divergence confirmation. So, that means you would need to show that you have removed losses from your trading system. If you have not removed any losses, the divergence filter, has done nothing. Also, you have to prove, using the matrix that the trades you skip (because they do not contain a divergence) turn out to be losers, because if they turn out to be wins, you are, in fact, making your system worse.

[alanscott]

Great video. Using Bollinger bands, MACD, and RSI together with 3x200 simple MA’s set for high, close and low. Patience and discipline make this approach consistently profitable. Thank you

[spreadLoveNtHate]

I practice this strategy for 2 days now. It improves my trading but it should not only be the used strategy. Trendlines and support and resistance is important still

[Marcszer]

They work but you're missing some things... Like, price structure context, market cycle changes (How it can adapt on them) and a volume indicator that fits with the logic behind the structure context. Also, you need a way/indicator/chart type that ends with the intrinsic delay created by the time of the candle/chart that you use. It will help with market cycle changes. Oh, also having a note on wich cycles it works and how to filter them, its a great way to maximize performance.

Basically you will only enter in the structure if the divergence happens

I say this, because thats the only whay that ive won something in the day trading of the index market, after almost 10 years of study and 2 graduations (math and data scientist). And dont forget the dynamic stop, so you can know for sure that it works. All objective, 0 subjective.

[jonneycarlos]

These past few days watching my crypto portfolio decline is very disheartening. Holding doesn't really profit much. Any ideas on how to earn better on the short run?

[deferick]

can you explain in more details what is 2 days divergence?

[maddoc]

Can you please clarify the strategy you were using to the backtesting you did? Which timeframe were you using? How did you use the daily, 2 daily, 3 daily etc. low, which timeframe were you looking at? When and how did you enter? Thanks.

[thescalpingant]

THE only divergences that work are the hidden/continuation divergences, classic divergences give random results.

[BigGG]

yes a profit is made but what if u did nothing, would the profit be higher

[lonzeegaming]

love your videos! extreme level editing!😃
please make more videos on your own indicater!
❤

[yogi]

Which one is the best TF in case of RSI to spot a divergence, please let me know

[brodymadden]

You need to see what drives your market then pick your indicator base on what group its in like price or momentum

[hamadxRL]

Been a fan
I legit sure you are a champ trader sir❤️

[karunarathnadinayadura]

Let me know which time is best for using of this strategy?

[claudebrogunier]

i believe you mean "We BUY on the Close based on Mean Reversion", right"? The Video says SELL at the close. But If Price makes new low and Indicator does not, doesn't that trigger a BUY signal?

[FunnyEditsForYou]

What if the divergence occurs near the 50 mark and not near the oversold or overbought lines? Is it still divergence?

[GD-bxpk]

Any reasonable strategy will work on the S&P just saying🤷🏽‍♂️

[johnd]

ok so this video is to sell you a product, spare your time and money...