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- The essence of the Master Method strategy?
- Divergence in automatic mode!
- What are the divergences?
- An example of a classic divergence
- Convergence Example
- Extended Divergence
- How to make divergence build automatically?
- Determination of divergence signals according to the Master Method strategy
- Buy signal:
- Sell signal:
- Stop Loss setting table:
- Trading recommendations
- Template + indicators
Not so long ago, the Master Method strategy was sold for 1000$, but due to the circumstances, now you can get it for free! The author of the strategy made a fortune on it and now it's your turn.
The essence of the Master Method strategy?
The strategy is based on divergence readings. What is divergence?
- Divergence is when the indicator readings diverge in values from the price readings in opposite directions.
The screenshot above shows a clear example of a classic divergence.
The price on the chart at the High and Higher high points is the same as on the chart of the lower indicator, and a reversal occurs at the last Divergence point. On the chart with the indicator, the readings diverge from the top chart.
The price continues to go up, and the lower indicator shows down, thereby warning that the price will soon turn around and go down, which is happening.
Here is a live example for gold:
The indicators do not draw, and it turns out that the divergence works ahead of schedule. The indicators and the Expert Advisor that comes with the strategy display a possible price reversal in advance.
As you can see, divergence works well on any timeframe and any pair. In addition, divergence signals do not have such a thing as SIGNAL STRENGTH - all signals are equivalent and are processed in the same way.
In general, the divergence on the charts, as a rule, is built manually, there are also special indicators that automatically display it online, but unfortunately not all of them work clearly.
Divergence in automatic mode!
This article presents a reliable working Expert Advisor, which works in tandem with the MACD indicators and the Stochastic Oscillator. Thus, in real time, the presence of divergences on the chart is drawn.
You do not need to configure anything, the kit comes with a ready-made template, which remains to be thrown into the folder with MT4, installed on the chart and you can trade.
What are the divergences?
In general, there are 3 types of divergences: this is a classic divergence (the price direction corresponds to the direction of the indicator) and convergence, it is also called hidden (when there is a discrepancy between the price and indicator directions) and extended (we look at the price direction in the direction of the indicator, since the price on the chart goes in a flat ).
An example of a classic divergence
As you can see from the figure, the direction of the indicator corresponds to the direction of further price movement on the chart.
The figure shows that on the chart the price goes in the opposite direction of the indicator.
Extended divergence is less common, and here the direction of price movement on the chart should be looked at in the direction of the indicator. If up, then buy, if down, then sell accordingly.
How to make divergence build automatically?
Now let's move on to the Master Method strategy template itself and this is how it looks:
The set, as already mentioned, includes all indicators + an automatic adviser with already configured parameters. To work, you need to install the template and add an adviser on top, which is in the archive in the expert folder.
For convenience, in the settings of the EA, you can change the color with which it draws divergence lines:
Determination of divergence signals according to the Master Method strategy
An important point is in the correct perception of the signal, namely: it is necessary that the line on the chart and the line at the lower indicator be parallel to each other, otherwise it is just a false signal.
The main signals are the readings of the MACD indicator, and, of course, the lines of the divergence itself, which are built by the adviser, and the stochastic is used for filtering, as an additional confirming signal for entry.
Buy signal buy:
Order Buy opens when the adviser draws a line on the chart and both indicators confirm the overall picture that this is a divergence;
stop loss set according to the general rule (see table below);
take profit we put it opposite the nearest support and a couple of points higher, in case the price does not reach it, otherwise it will be a shame.
Sell signal Sell:
With a Sell order everything is the same, we look at the pictures above how the bearish divergence looks like (for sale) and open a deal down if the lines match;
stop loss look at the table below;
take profit set opposite the nearest resistance and a couple of points lower.
Stop Loss setting table:
|Timeframe||Indent in points|
|W1 (1 week)||100-200|
|MN (1 month)||150-350|
Recommended couples: any couples;
Time to trade: any;
Recommended Broker: FinMaxFX
Template + indicators
To download the Master Method strategy for free, you need to leave some comment on this article, immediately after that a link for downloading files will appear here.