00:00every single day trader has losses when
00:02they're starting out and i can tell you
00:0599 of my losses when i was starting
00:08was because i could not spot the
00:10divergence so in this video i'm gonna
00:12show you exactly how to enter
00:14every single one of your trades based on
00:17a divergence that's going to give you a
00:18very high probability of success
00:24welcome back to the channel everybody my
00:25name's artie and this is the moving
00:27average a show where we discuss
00:29everything day trading to keep you
00:30profitable on a consistent basis
00:32if you guys have watched my previous
00:34videos you guys know that i've lost
00:36lots of money in the forex markets when
00:39i was first starting out
00:40i didn't let those losses keep me from
00:44education and getting better and better
00:47now i trade profitably on a consistent
00:50and 99.999 percent of my success
00:55is due to spotting a divergence whether
00:59bearish regular divergence or a bullish
01:02hidden divergence i can see them every
01:06because it's all that i look for so
01:08let's jump into the charts and i'm going
01:10examples of every single one of these
01:14off of the divergence all right first
01:15thing that you're going to want to do
01:17is get on the charts on trading view you
01:20down below to the website it's
01:22tradingview.com what you want to do
01:24is get on the cryptocurrency or the
01:28pair that you trade most often and look
01:31on a one hour time frame we're not going
01:34to put any other indicators on here
01:36except for the rsi but we're not going
01:39to use the standard rsi settings i want
01:41you to adjust them like i have
01:43so click on the indicators tab and type
01:47it is in the built-ins it is the
01:48relative strength index
01:50put a star next to it you want it on
01:52every single one of your charts
01:54and click it once once it's up on your
01:56chart you're gonna see the indicator
01:57down here on the bottom it's gonna look
01:59different than mine but here's how you
02:01can adjust your settings
02:02click the settings wheel right here
02:04leave the length at 14
02:06and change the style i like yellow
02:08because that's the color theme of the
02:10channel so you can change your rsi color
02:13and you're going to change the upper
02:14band and lower band to 50 and 50
02:17making it a solid line not a dotted line
02:22look exactly like mine the reason we're
02:24doing it this way is because looking at
02:26overbought or oversold is the wrong way
02:30to trade the rsi the rsi is a momentum
02:33indicator it is showing momentum in a
02:36likewise it also shows a loss of
02:39in a certain direction and that's where
02:41the divergences come into effect
02:43so the first divergence example i want
02:46is a regular bullish divergence you can
02:49see that the price was coming down for
02:51quite a period of time
02:53every single time creating a new lower
02:57all the way down to here as these lows
03:01my eye is always going to the rsi to
03:05a big fat divergence this is how to
03:08a solid trend reversal so as you can see
03:11here the price created a lower low
03:13but on the rsi the rsi level
03:17of this bottom was 19 and for this
03:20bottom it was 21 meaning that the
03:23downwards momentum that the price
03:25action is showing is no longer valid
03:28it's got a loss of momentum it's higher
03:32strength index at this point it started
03:35and come up now what i want you to do
03:38watch a solid rejection this candle is
03:40too small for a rejection so you want to
03:43wait for a subsequent candle in that
03:46at that point you can put in your order
03:50with a stop loss below the wick of this
03:53candle at the bottom here now what i
03:55want you to do when you're first
03:57is set your risk to reward ratio for a
04:01meaning that your risk is one and your
04:04once this target hits i want you to
04:07close ninety percent of your
04:08trade move your stop loss for the
04:12ten percent into profit so it's a
04:15risk-free trade and let that thing ride
04:18until you're comfortable with your
04:21don't be greedy take your profits when
04:22you can if you're new
04:24just take 100 of the trade right here at
04:27a one to two so that's how to spot a
04:29trend reversal with a divergence on the
04:32is an example of a regular bearish
04:34divergence you can see the price was
04:37creating higher highs consistently and
04:39then at this higher high we had a
04:42rejection two rejection candles off of
04:45so again my eye goes to the rsi and we
04:49lower high on the rsi this is another
04:52divergence but this divergence
04:54means it's going to go down again
04:56putting in your short position here
04:58at the close of the second candle with
05:02above the previous high targeting a one
05:05to two risk to reward ratio
05:07again once you get out of being a
05:09beginner day trader you can continue to
05:11hold these trades depending
05:13on the strength of the movement what i
05:15mean by that is seeing these big
05:17fat red candles shows a lot of momentum
05:21but again i want you to close 90 of your
05:24trade at your normal take profit level
05:27let the rest ride so just to clarify we
05:31in the price action but a lower high in
05:34now there are two other types of
05:37and these are the ones if you are new i
05:41use these they are hidden divergences
05:44now the reason i say if you are new
05:48the number one rule in day trading and
05:50any forex trading trading
05:54is the trend is your friend always trade
05:58this is going to give you the highest
05:59probability of success
06:01the issue is how do you know if a trend
06:03is going to continue
06:04or reverse that's when the hidden
06:06divergences come into play so instead of
06:08waiting for a reversal
06:10we are actually going to trade with the
06:12trend looking for these hidden
06:15this is an example of a hidden bullish
06:17divergence you can see that the price
06:20was making higher lows but on the rsi
06:24it was making a lower low now let me
06:27explain how this works
06:28the momentum was going up correct as it
06:31went up and started to come down
06:33it became more oversold at this point
06:37than it was at this point
06:38meaning that we are in an uptrend but at
06:42more oversold so if something is
06:46it should continue up so we get this big
06:49fat rejection candle and these are the
06:50ones that are the strongest
06:52instead of waiting for two you can trade
06:54just off of this one
06:55go in for your long position targeting
06:58the bottom of that big move candle and
07:01going for a one to two risk to reward
07:04now the other hidden divergence is on
07:06the downside it is a hidden bearish
07:09the price is going down creating these
07:12lower highs yet at this point on the rsi
07:16it was much higher meaning that the
07:18market at that point was
07:20more overbought than it was at the
07:23when something is overbought that means
07:25some selling should occur
07:26so that is your signal for the trend
07:28continuation down and again we got this
07:32fat rejection candle and you could have
07:35on your short position targeting the top
07:38of that candle as your stop loss
07:40going for a one to two risk to reward
07:44how much could you have made off of
07:46every single one of these trades that i
07:49on this this is euro australian dollar
07:52and with this one move you got 36 pips
07:55on australian dollar u.s dollar which is
07:58the hidden bullish divergence
08:00you would have gotten 41 pips on this
08:02one move now the regular divergences
08:04that i showed you were both
08:06on indices one was on us 30 and one was
08:09the german 30. this one move right here
08:12this one to two risk to reward ratio
08:14got you a hundred point move on an
08:18index using a 0.01 lot
08:21size on this move this is a hundred
08:24dollars profit with a 50
08:26risk on us 30 we had that regular
08:33point move with a 158 point
08:36stop loss so again on a 0.01
08:40depending on your contract size this
08:42could have profited you
08:43321 dollars and that was just in a few
08:47now all this analysis was done on the
08:50and i suggest you do this on a higher
08:53time frame because these divergences
08:55hold more weight than they would on the
08:58five minute or the one minute
09:00the concept still works the same on
09:02every single time frame
09:03you just need to be more aware of the
09:05fact that there are more
09:07false signals on lower time frames now
09:11false signals this is how you can
09:13actually prevent yourself from getting
09:16on a false signal and waiting for more
09:19confirmation and more confluence
09:21using a trend line on these trend
09:25so it's only for the regular bullish
09:28or the regular bearish divergence trades
09:30i'm going to get rid of my order
09:32position right here and what we're going
09:34is actually draw a trend line i have a
09:37trend line drawn here to show you
09:39the lower low and the higher low on the
09:42but what we're gonna do is draw a trend
09:45on this price action as the price is
09:48continuing down it is maintaining a
09:51trend so you draw a trend line across
09:54the tops of the highs
09:56and once the price actually breaks
09:58through that trend line
10:00and you're getting the divergence here
10:04at this point we've broken the trend
10:07and the trend is reversing because we
10:10can see that in the rsi with the
10:13so at this point is when you can get
10:15into your long position
10:16always wait for the close of the candle
10:19because the close of the candle
10:21is more concrete than waiting until it's
10:24because it could wick back down being a
10:27breakout of the trend again let me show
10:31the german 30 drawing a trend line
10:33across the bottoms of the price
10:36action you can see that once we broke
10:38out of that trend we came up to retest
10:41rejected down and formed a new trend
10:43causing a trend reversal and
10:46that would have been your entry point so
10:47you probably would have waited for this
10:49big fat rejection candle
10:51again targeting your stop loss above the
10:54of that candle also if you guys are
10:56still watching this video that means
10:58that you like the video so make sure
10:59you're dropping a like down below
11:00every single time i see a trade setup
11:04the first thing i do is stop and i don't
11:08i look for divergences and i look for
11:10breaks in trend lines i look for regular
11:12hidden divergences to see if my analysis
11:17on that you can see that i'm not using
11:19any other indicators
11:20except for price action and the rsi but
11:24i get so many dms and so many messages
11:28on our discord group of people showing
11:31on a divergence and it's always off just
11:34a little bit so this is going to be
11:36the ultimate bullish and bearish regular
11:39and hidden divergence lesson that you're
11:42if you don't fully understand it just
11:44yet re-watch this video a few times
11:46until you've got it implanted
11:48into your brain just trading this one
11:52period is going to give you so much
11:55and so much profits in your account you
11:58will literally have your mind
11:59blown and if you guys want to use this
12:02same divergence strategy
12:04looking and trading a double top check
12:07out this video right here it breaks down
12:10exactly how to trade a double top and if
12:12you guys enjoyed this video and you like
12:14the way that i teach
12:15make sure you're subscribed to the
12:16channel by clicking this button right
12:18thank you so much for watching and we
12:20will see you in the next video
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