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Rangarjan, I'd like to add a comment to your chart.
I've noted with my marks the nature of what is going on with this market. In the past, there was also divergence and several times the market was OB without responding to the oscillator. When it has it ever slight reverse, the oscillator drops rapidly. Price cannot keep up. This is showing on this TF that momentum still heavily favors the UP.
What will eventually happen is this trend will give out, and there will be a hard drop in this TF.
Having said that, this appears to be the 5-min chart. If this is the case, then you may want to look at a higher TF like the hourly or 4-hour. Something tells me those TF's could be freshly OS and opened UP. Therefore, the higher TF would have kept you in the trade the whole ride north.
In a heavy trend on the higher TF's, the doors will get blown off the lower TF's.
Thank u 4xpip.
To the point,bullet reply.
But the trouble with yr posts for people like me(we call Tubelight),is yr jargons forcing me to refer dictionary often(which i should have done in my school days)
I had to read thrice before i could grasp & i compare u to TM
But like TM,
your knowledge is powerful.
Thanks for sharing yr experience & knowledge without hesitation.
Coming back,u r 100% correct.It was a 5min chart & as i had mentioned in my post,the metal was in up trend in one hr TF.It went upto 407.4 & kudos to yr prediction.
But,the chart was intraday & the intention was to grab a few pips! or paise as the lot size is 1000.So,one is compelled to exploit the divergence inspite of its limitations since this the first chart where as i am seeing where divergence never worked continuously.
I recall some where Smart replied that when the stock is in O/B for more than 5bars repeatedly(twice in that case),third time in O/B 5 bars, it may fail to go up as the buying pressure got exhausted.That gave me confidence to short.I agree trading with tech is only probablities & not science.
Invariably,i had shorted/bought with divergence & made profits only.
This time,it is another lesson.
Quote:
'What will eventually happen is this trend will give out, and there will be a hard drop in this TF'
unquote:
Can u pl elaborate.Which trend,TF,hard drop you r discussing,5mt or higher.,
Quote:
'In a heavy trend on the higher TF's,
the doors will get blown off the lower TF's'
u mean to say the s/l would be triggered in lower TF.
And last,when we r trading intraday divergences,if i have to look at 4hr/one hr time frames, cabn i get an opportunities at all?
This chart is from MCX India for commodities,copper.
Though i address my posts to Smart,i welcome comments from experts like you & other friends here since it is learning process ever.