“Forex & Stocks Trading Strategy” STOCH-MACD Divergence System

“Forex & Stocks Trading Strategy” STOCH-MACD Divergence System – The Mandatory Rules for Trading Divergences that Every Trader Must Diligently Follow. The rules you MUST follow if you want to seriously consider trading using divergences.

Trust us, you don’t wanna be ignoring these rules. Follow these rules, and you will dramatically increase the chances of a divergence setup leading to a profitable trade.

Looking for two popular indicators that work well together resulted in this pairing of the stochastic oscillator and the moving average convergence divergence, or MACD.

This team works because the stochastic is comparing a stock’s closing price to its price range over a certain period of time, while the MACD is the formation of two moving averages diverging from and converging with each other. This dynamic combination is highly effective if used to its fullest potential.

 

• Download “TraderVersity-STOCHMACDdivergence” (Zip/RAR File).
• Copy mq4 and ex4 files to your Metatrader Directory …/experts/indicators/
• Copy the “TraderVersity-STOCHMACDdivergence.tpl” file (template) to your Metatrader Directory …/templates /
• Start or restart your Metatrader Client.
• Select Chart and Timeframe where you want to test your forex system.
• Right-click on your trading chart and hover on “Template”.
• Move right to select “TraderVersity-STOCHMACDdivergence” trading system and strategy.
• You will see the “TraderVersity-STOCHMACDdivergence” system is available on your Chart.

 

When seeking to open BUY positions, observe indicator readings as follows:

• Connect BOTTOMS only. Once you see two swing lows are established, you connect the BOTTOMS.
• Be Consistent With Your Swing Lows.
  • You MUST draw a line connecting two lows on the indicators (MACD and STOCHASTIC). They have to match. If you draw a line connecting two lows on price, you MUST draw a line connecting the two lows on the indicators as well.
  • The lows you identify on the indicator MUST be the ones that line up VERTICALLY with the price lows.
• Watch the Slopes. Divergence only exists if the SLOPE of the line connecting the indicator bottoms DIFFERS from the SLOPE of the line connection price  bottoms.
  • The slope must either be: Ascending (or rising), Descending (falling), and Flat.
• When the MACD Histograms are crossing above 0,  this is high probability signal to BUY.

 

When seeking to open SELL positions, observe indicator readings as follows:

• Connect TOPS only. Once you see two swing lows are established, you connect the TOPS.
• Be Consistent With Your Swing highs.
  • You MUST draw a line connecting two highs on the indicators (MACD and STOCHASTIC). They have to match. If you draw a line connecting two highs on price, you MUST draw a line connecting the two highs on the indicators as well.
  • The highs you identify on the indicator MUST be the ones that line up VERTICALLY with the price highs.
• Watch the Slopes. Divergence only exists if the SLOPE of the line connecting the indicator tops DIFFERS from the SLOPE of the line connection price  tops.
  • The slope must either be: Ascending (or rising), Descending (falling), and Flat.
• When the MACD Histograms are crossing below 0,  this is high probability signal to SELL.

 

Trust us, you don’t wanna be ignoring these rules. Follow these rules, and you will dramatically increase the chances of a divergence setup leading to a profitable trade.

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