Скачать или смотреть Trade Plan for the Quad Divergence great write up by member

One of our members took a lot of great notes during one of our 1 on 1 coaching sessions, I feel it would be beneficial for everyone especially new members. Thank you Nick Hope you are ok with Posting this great outline

QUAD ROTATION DIVERGENCE TRADE PLAN

STAGE 1:

Identifiable larger internal or external channel or wedge (3 touch pattern to generate anticipated parallel line)

The divergence should have the stochastics under the 20 Line on all 4 stochastics

That low should bounce bringing the 9-3 stochastic line back above the 20

No trade if 60-10 is over 90 or below 10 (embedded) OR moving horizontally for period of time (subjective but will be in generally in a trend, climbing a channel and respecting 20/50 ema)

STAGE 2:

Price action then creates a new lower low or double bottom.

9-3 stochastic creates a higher low and starts to turn up

9-3 stochastic must enter back above the 20 and create a higher low above the 20

No trade if 60-10 is over 90 or below 10 (embedded) OR moving horizontally for period of time (subjective but will be in generally in a trend, climbing a channel and respecting 20/50 ema)


STAGE 2 OVERRIDE

o When there is no 9-3 divergence however 14-3, 40-4 and 60-10 do have divergence


ENTRY AND POSITION SIZE

Market order on rejection candle either high lest, low test or engulfing (green candle for long, red for short)

Contract sizing to achieve max risk of 0.5% of account

SL placed 1 x tick coverage over entry candle

Maximum 2 point SL. Limit order to be used if required to achieve this


BE PROTOCOL

Move SL to BE once rotation starts to occur at 80 or 20 on 9-3


TAKE PROFIT

Fixed take profit at 3 points


Optional Recommended Criteria

5 Min and/or 60 Min stochastics should be moving up (preferred) off oversold or over bought

The lower low should be complimented with a strong reversal candle (low test, engulfing etc)

Having divergence on the other stochs in addition to the 9-3 provides more confluence

Key Considerations

If price is in a trend with long term channel with price below all EMAs and VWAP be careful for false divergence signals. If the 60-10 is embedded under the 10 be careful of this. Wait for breakout of channel and rotation of stoch to reset.

20/20 Bull flag strategy is more suitable for entering in an embedded trend channel scenario. Ie playing the continuation flag within the channel

If in down trend watch the entry does turn into a bear flag by seeing if the 60-10 stays beneath 10 and embedded

Running divergence is multiple consecutive divergences that cause a 3 touch trend line on the stoch. If taken out on the first you should take the second

Lip divergence is when the divergence is very slight and not steeper which is the ideal scenario

Steeper the 9/3 divergence the better. Typically 6-8 degrees

Wicks do not have to be used for trend lines. Closing bodies can be used in order to create a logical channel. What makes most sense.

The 60-10 represents the 5min trend. If the price or channel is moving in line with the 60-10, there is alignment with the 5 min trend

If price is embedded, wait for the 60-10 to rotate to 80 or 20 in order to ‘reset’

Major channel or trend line if not required for a trade, a smaller channel is acceptable if all other criteria is met

System is built to perform as a high SR scalping system. If BE or higher TP protocol is required, this must be backtested

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