Continuing Divergence How to trade it and how to manage it Vladimir Ribakov s Divergence University

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Ira Hood
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1 Continuing Divergence How to trade it and how to manage it

2 What we will learn Confirm the divergence Prepare next entries Set the target Stop Loss Yes or No? Examples + Test

3 Confirmations It s VERY important to confirm that once the continuing divergence happened then the level it shows is a level that has stiff resistance/support/trend line on the same time frame or one time frame higher. You can also use the advanced tools we will learn on next courses such as bollinger bands duplication, bollinger bands riding, fibonacci special level and more.

4 Confirmation - Example v

5 Confirmation - Example v

6 Prepare the next entries I will explain later about trading this divergence type with stop loss or without stop loss. But anyway, as we said earlier, continuing divergence sometimes last long time before it is making the real move. Therefore, once it appears, we need to build a trading plan. The first step is to set the next entries. We have to do it if we use stop loss and if we are not. I will explain the differences later.

7 Prepare the next entries Preparing next entries is very easy. All we need to do is to mark the next stiff support / resistance level. Then, we can wait for a candle pattern to appear around the level or we can just attack the level. If you will use stop losses for this trading, then wait for candle pattern first before you enter. If you don t use stop losses trading the continuing divergence (I don t use them too ) then you can attack the levels. Let s see how it looks like:

8 Prepare the next entries v

9 Targets Now it is the most interesting job. Where do we set our target? The rule is VERY simple! The target, as default, is 20 MA of the Bollinger Bands on the time frame you entered the trade! If the trade you entered didn t work and didn t reach the 20 MA and you enter another trades on the next levels that you prepared, your target becomes the level where the divergence was created first.

10 Hmmmm

11 Setting a target v

Both opinions are legitimate and I can t answer what is better.

12 Stop Loss Yes or No? The biggest question when you trade continuing divergence is: should we use stop loss or not? There is no clear answer. Some traders think that stop loss is the worse thing trader can use in trading life. Other traders think that if anyone trades without stop loss he is not a real trader. Both opinions are legitimate and I can t answer what is better. For my trading, I don t use stop losses but I do use exit plan and trading plan in case the divergence doesn t work as I wanted it to. On next courses we will learn all about exit plans so in case you will choose not to use stop losses while trading continuing divergence (Like me) then you will know when to exit a trade anyway.

13 Stop Loss Yes or No? If you choose to use stop loss, then you have to enter a trade after candle pattern only and set it above last high or below last low (As we ve learned on regular divergence). Remember One continuing divergence started and the market still goes against you, when the right time comes and the cycle begins the level where the divergence started will be reached again! That s what I call the cycle trading. So if you use stop loss, you can lose few trades in a row, but once the move happens, you will cover the whole move back and profit MCUH more than you lost in total. And now it s time to see some full trades examples:

14 Continuing Divergence - Trading v

15 Continuing Divergence - Trading v

16 Continuing Divergence - Trading v

17 Continuing Divergence - Trading v

18 Continuing Divergence - Trading v

19 End of lesson That s all for now. Now you know how to trade the continuing divergence, you know the advantage and the disadvantage of using a stop loss and you are free now to build your own style trading the continuing divergence. Remember The MOST powerful idea behind the continuing divergence is the cycle trading Once a divergence started and the market pushes against us when the cycle happens then the prices will back to the level where divergence started! There is just NO other way! Now please take the exam for this lesson. See you there.

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