S and P 500 SPXUSD stochastic divergences
Practicing Stochastic Divergence from 3 - 26 to 5 - 29 on a 1 hour chart recorded about 63 so a little more than 1 per a 23/5 trading day (this SPXUSD includes the futures trading period). I measured from K blue line peak to another blue line peak. A few of the ones I recorded were close to a double bottom or top but if the stochastics showed a little different or the price action was a little different and in favor of a divergence I more often chose to record it.
Key
Bullish Divergence - bu d it occurs when the price action is forming a lower low but the oscillator is forming a higher low better positions if oscillator is at oversold levels.
Bearish Divergence - be d occurs when the price action is forming a higher high but the oscillator is forming a lower high and probably better if the oscillator is at overbought levels.
Hidden Bullish Divergence - h bu d occurs when the price action is forming a higher low but the oscillator is forming a lower low
Hidden Bearish Divergence - h be d occurs when the price action is forming a lower high but the oscillator is forming a higher high.
Hidden Bullish and Hidden Bearish Divergence will generally represent continuation in the trend where as Bullish divergence or Bearish Divergence will generally make a change in direction of the current trend.
I noted after the divergence showed up on the Stochastics the amount of price change and the time span. Back in March and April and when the volatility was a little stronger the point moves would range about 30 to 150 points 1 to 5% with and average about 60 to 80 1 to 3% on each divergence. May and lower volatility has weakened a little and the point moves are about 20 to 60 1 or 2%. After the divergence was detected the price usually went in favor of the divergence like 80 or 90% of the time. The price swing was generally right after or soon after the divergence was detected. If you took the trade the majority of divergences would last about 2 to 4 hours some would last about 6 or 7 hours a few up to 24 hours. The notes that I recorded generally took out about 5 or 10 points from the top to bottom because in reality you are probably not going to catch the best opportunity but it appears that if you chose to take the trade you would probably have a winning trade after a few hours or 6 hours later. It will be a bullish divergence or bullish hidden divergence if you are measuring price action of low troughs and it will be a bearish divergence or hidden bearish divergence if you are measuring from one high apex to another apex. I believe the Stochastics is a lagging indicator, but if you are also looking the candlestick formations and looking at the stochastic readings and seeing signs of the probability of the divergence more likely to happen you might be able to catch the divergence a little earlier. I didn't really pay that much attention to divergences until I started watching some of the Nadex educational videos especially from the speaker Gail Mercer who uses it along with candlestick price action/formation reading.
Key
Bullish Divergence - bu d it occurs when the price action is forming a lower low but the oscillator is forming a higher low better positions if oscillator is at oversold levels.
Bearish Divergence - be d occurs when the price action is forming a higher high but the oscillator is forming a lower high and probably better if the oscillator is at overbought levels.
Hidden Bullish Divergence - h bu d occurs when the price action is forming a higher low but the oscillator is forming a lower low
Hidden Bearish Divergence - h be d occurs when the price action is forming a lower high but the oscillator is forming a higher high.
Hidden Bullish and Hidden Bearish Divergence will generally represent continuation in the trend where as Bullish divergence or Bearish Divergence will generally make a change in direction of the current trend.
I noted after the divergence showed up on the Stochastics the amount of price change and the time span. Back in March and April and when the volatility was a little stronger the point moves would range about 30 to 150 points 1 to 5% with and average about 60 to 80 1 to 3% on each divergence. May and lower volatility has weakened a little and the point moves are about 20 to 60 1 or 2%. After the divergence was detected the price usually went in favor of the divergence like 80 or 90% of the time. The price swing was generally right after or soon after the divergence was detected. If you took the trade the majority of divergences would last about 2 to 4 hours some would last about 6 or 7 hours a few up to 24 hours. The notes that I recorded generally took out about 5 or 10 points from the top to bottom because in reality you are probably not going to catch the best opportunity but it appears that if you chose to take the trade you would probably have a winning trade after a few hours or 6 hours later. It will be a bullish divergence or bullish hidden divergence if you are measuring price action of low troughs and it will be a bearish divergence or hidden bearish divergence if you are measuring from one high apex to another apex. I believe the Stochastics is a lagging indicator, but if you are also looking the candlestick formations and looking at the stochastic readings and seeing signs of the probability of the divergence more likely to happen you might be able to catch the divergence a little earlier. I didn't really pay that much attention to divergences until I started watching some of the Nadex educational videos especially from the speaker Gail Mercer who uses it along with candlestick price action/formation reading.
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