I told you many times that I am a big fan of Divergence.
So far, I have introduced you many example of Bearish Divergence.
It is my great pleasure to introduce Bullish Divergence.
Only the issue is … this is on the Daily chart. So the price may go up today, tomorrow or even next week.
Nonetheless, let’s build up the Long setup.
On H4 chart, the Stochastic “up” cycle has already started. The price has once bounced up from Fib 50%, but came back to 50% level again.
Looking at the Hourly chart, the price is forming “Triple Buttom”, and Stochastic down cycle is “almost” over. Please note that if in fact, the price goes up from here, that is to say “from DS1”. Pivot theory predicts the target should be DR1, which happens to be WPP as well.
Well, let’s talk about the entry.
On M15 chart, Stochastic down cycle has just started. We should at least wait until this down cycle is over.
And when it is over, check the price. If the price won’t be lower than the support (183.93), then I would like to buy this pair.
I also found Bullish Divergence on M15 Stochastic!!
Stop should be below 183.90, and the target should be DR1 (185.30).
Hope this setup helps you build your own.
YJ Baik – Forex.Today @ Tokyo