Day and swing traders must learn to apply the convergent trading strategy like a pro. To achieve winning trades day in and day out, one ought to time the financial markets more precisely.
Surely, one those ways to time the markets is to take a precise convergent signal. For a day trader, the matter of precise market timing becomes critical because he or she does not have the whole day to fool around. Therefore, a day trader will improve day trading results just by focusing on the convergent trading signal.
Similarly, a swing trader who is applying the convergent trading strategy will regularly uncover more reliable swing trade setups. This article is for both beginner and advanced traders who are tired of the ups and downs of technical trading results.
What Is Convergent Trading
Convergent trading strategy is a trading strategy that allows a technical trader to buy a financial asset or instrument when both bullish and bearish traders are buying at the same time and sell precisely when both groups are selling altogether.
I have never seen more gorgeous trading signals than convergent signals. The last thing that a bullish trader wants is to buy when the bearish traders are ganging to sell. The opposite is also true for a bearish trader that is entering a bearish trade. One does want to enter a trade, and begin to wonder why he or she even enters the trade.
Yes bullish traders do sell. They sell when they are closing a bullish position.
Also, bearish traders buy when they are taking their profit. It makes sense to buy a stock together with the bearish traders instead of fighting them like a donkey. A convergent trading signal derives from convergent trading setups.
How Does A Convergent Trading Signal Occur
One is more likely to see a convergent trading setup at the following price levels:
1/ Mid and ultimate price target levels.
2/ At the end of a specific price structure or pattern.
Think of Elliott wave patterns, Fibonacci patterns, some
distinctive price structures or patterns. Think of the end of a trend (motive wave), ABC and ABCD patterns.
The market principle that rules the phenomenon of the convergent trading strategy states:
No financial instruments rise or decline for no reasons, they are always headed to specific price targets.
This is the most important market principle. Yes, you shall know the truth and the truth shall set you free. The truth here is the market principle. Believe it or not the most influential financial
market participants do care too much about the price targets. It will be crazy to risk enormous amount of money without knowing where the price-action is more likely to be headed.
Examples Of Convergent Trading Strategy
Price reaches the ultimate target level after forming a V, round or inverted head and shoulder pattern.
At least sixty percent of the bullish traders are likely to bank some profit in the zone of the target level.
We know and expect that, but we are not assuming anything.
Those bullish traders will sell if they are taking profit.
Usually, the bearish invitation card is the common sense trend line that is broken. Once that candlestick bar
is closed; well, we will implement a top-down trading method to enter the trade at the convergent point.
Do not worry if you still do not fully grasp how to trade a convergent trading signal. I will be adding a video to
this web page.
Look for candlestick patterns, chart patterns or a lower high or higher low after the price reaches the convergent
Another time when a convergent trading setup is in place is when a Fibonacci pattern is completed at the point D.
For example Gartley, Butterfly, Bat or Crab pattern is completed at the point D, one will draw horizontal line at that point
and implement the different times frame trading method once the common sense trend line is broken.
Remember that one is looking for trading setups that take place where and when both bullish and bearish traders
are doing the same thing.
Warning: One ought to adhere to the trading drill when one is trading convergent trading signals.
Trading Drill = Setup then Signal then Entry on different times frame.
A technical trader who is willing to improve trading results will find the convergent trading strategy very useful.
It does not matter whether one is day or swing trading or position trading. Both beginner and advanced traders
will begin to land heavy punches in the financial markets if they learn to master the convergent trading.
Finally, the convergent trading makes sense because it is based on the most important market principle that I have already mentioned in this article.
A TSTW 24 trader that identifies a convergent trading signal
must go to the first best time frame and wait for signals. TSTW SYS 008 traders can combine convergent trading with the stochastic patterns.
As always, I enjoy writing this article, and I hope it has waken you up a bit. If that is the case, feel free to share it on
the social media. Thank you for visiting https://www.stochastic-macd.com today.
This article is written by George Beaulieu