Friday, March 26, 2010

Follup on the 3-day (5-minute) chart.

I was explaining on this chart how the 1,5,10 minute chart day trade using the "Divergence Trade of 3's". This is an update to that were we had an end to the down channel on bullish divergence @ the 1161 bottom. It is very hard to tell if we have divergence there on the 5 minute chart on left, but the 1 minute will give you a clearer look. (below)

Notice on the 5-minute chart once the sell criteria is met I make a new fib (pink) from the last low to high. RULE#1 = know your surrounding (look at longer-term charts to find key area's of support/resistance) I posted the 60-minute chart on my previous post to also know that 1161 is a strong support level.

On the 1-minute I saw bullish divergence and the trand break confirms it for me to get out of the possition.