Jordan reviews four trade setups from the week: Bitcoin showing a failed bearish divergence, GBP/JPY with a double-top and 1:1 risk-reward target, a bullish GBP trade with overlapping divergences, and QEM with an impulse-downward wave. He emphasizes using well-defined levels, zones, and proper risk-reward sizing.
Chapters
Hello everyone and welcome to another Divergence University review. My name is Jordan and today we're going to be talking about the previous week, which was from August Was that 9th up until the 13th, Friday 13th? Just a few trades there, but, um, I think we can learn a thing or two from that. So let's go ahead and cover all of them one by one. And of course, if you have any questions by the end of this video, um, leave us a comment or find us in the Telegram group and we'll get back to you as soon as possible. All right, starting with Bitcoin, which failed. Uh, first of all, we need this Bitcoin 4-hour chart. Let's see what do we have at that moment. So the price starts pushing up. Now, whether we're going to be talking about this being the first wave, okay, or we're going to start counting from that point That being the first wave, it doesn't really matter because we can see that divergence started building here. We got the pullback, we never managed to reverse, and this is where we have the continuation. Now once this continuation started, we can see one very clear thing. This is the lowest point after the pullback, so we start the count from here, and this is where we get, uh, this 5-leg structure coming with divergence at the end. All right, perfect. This is also the first false break, right, on this candle. Perfect. So this is where we get the pullback. The price is rejecting to go ahead and break the previous high, and we start pushing lower. This is also the place where we can see on the MACD that Uh, the momentum is going down, exactly the same thing as we're having here, right? This is the same exact idea. So the assumption here is that we're going to get a pullback which we want to be trading. Unfortunately, the price pushed up and, uh, the idea couldn't deliver. Next we have pound yen, which is also a bearish opportunity. And for pound yen, we should probably start off with the levels. Looking back, we can see that on this part we have a level, right? This is the top. This is where the price stopped on the pullback and then continuation. This zone was tested multiple times afterwards, and of course we have the spikes, etc. That's why I'm calling it a zone here, right? So we're coming closer to this level once again, and this time we're forming divergence or double top, call it as you wish. It is a slowdown, definitely. So you have the false break, uh, on the left part right here. Then you have a double top. On your broker, it could be slightly higher, slightly lower, doesn't really matter, still the same thing. We have bearish pressure, right, starting from this point Divergences, divergences, divergences, divergences, right? And it comes to this place where we have finally a good level, multiple times to go ahead, rejection. So it starts to make sense that we're probably going to see some decent pullback. Plus you can see where the target, um, comes in play here. It's above the bottom, right? This is super important, at least for me. Because when you're trading divergences, let's say you're trading this divergence here, somehow for some reason, I don't know why, you have the swing high, right? So if this is your divergence, this is the first swing, but on the larger picture, this is your swing. Now in order to get the target down to here, you should be trading 1:1 risk-reward ratio somehow. Or I don't know what, but this is going to be tough to, to manage to somehow close the trade immediately on this low, right? So because we are looking at this thing as a whole, and this is the structure, and this is where the slowdown started on this part, right? In my opinion, we can actually afford to look at this thing as a whole and then That's the level, not this one. This is a zone. Of course it's a level; we can see it clearly. But it's somewhere in the middle of the bigger structure. If this is my bigger structure, this is the middle of it somewhere, right? So that's about pound yen, at least the way I'm looking at it. Then we have your pound. Bullish idea for this thing. It's kind of more or less simple because that's the structure, the bigger one. Um, you have the divergence of course right here, and then you have divergence on the small part right here. Okay, so 2 divergences more or less completing at the same time, plus we have a very decent bullish candle pattern. So in my opinion, the risk reward here— of course we use fixed, fixed risk reward, but the risk reward in terms of the level is worth it. And it would have been better if the target was right here, of course, right? Because for me, this is the zone right here. So my target better be somewhere below the bottom of this one, right? That would be fantastic. But then again, we go to 1:1, not 1:2. So this way, the target is still inside the box, inside the level, but the chances of reaching it are going a bit lower. So if you're around the PC, that might be a good place to start managing it manually and probably trailing the stop Uh, just to avoid situations where the price comes here, bounces, and then goes lower immediately. Something like that. You can see, by the way, here on the next image, you can see it. So if there's the zone, guess where the price reacts? You see, that's why I'm preaching about levels, levels, levels, levels, levels, and zones. It all starts and ends with a level. Right? It doesn't matter how good your setup is. If you don't have a good level, your chances of success are decreasing immediately. Okay, um, last one, let's cover it very quickly. QEM. This is in a more or less bullish trend because we can see the price is moving upwards with these larger waves, which could be seen on the higher time frame most likely. And at that point, uh, the idea would be to look for most likely continuation up because look at this zone, okay? Fantastic level. And now the price is coming kind of closer to this. You have these spikes, you have this spike, so looks good, right? In terms of levels, for me at least, this is a good, uh, the good moment Then you have the impulse to the upside. This impulse is followed by a double wave to the downside, and this is where we get divergence, right? Now, the difference between the MAs and histogram divergence we explain in depth in the courses, in the groups, in the Traders Academy Club. So if you have questions about that, you can always bring it up. But in order to keep this video short, let's just say that we have the divergence and this is where we're looking for, uh, the potential buy opportunities. Now the problem I have with this specific setup, the aggressiveness increases a bit for me because the previous candle or the candle before the previous candle is super powerful and then we have, even though this is more or less good bullish candle, the size of it compared to the previous one is not exactly what I'm looking for, right? I'm looking for powerful moves when it comes to a place where I'm expecting the price to reverse. So let's say this is some sort of divergence and you have this, right? It happens. I'm not saying it's not going to happen. It does happen. But when you're looking at— let me see if I can find a good example. Uh, let's say this one. So you have push up, you have the spikes. The spikes are a giveaway that there is some sort of rejection of this zone, okay? The buyers are not able to provide enough volume to push the price above these levels and to hold the price above this level. So they, they're pushing the price up and then the bears are pushing it back down, right? Right? This is what's happening. That's why we get the spike. Now, this is the first thing. The second thing is look at the size of these candles. This is a massive, massive bearish volume here. So first of all, they managed to push the price back down from here to here, and they, they managed to close the next candle opening from here down to here. So this is happening 1-hour chart, 2 hours time. Inside 2 hours, look at this move, right? So this is clearly telling you that, yeah, you're most likely going to see some continuation to the downside. I believe this is Friday what we're talking about, so I'm not sure if I will be trading that. Of course, there is more to these setups, right? But this is part of the equation, reading the candle patterns, because the candle patterns are basically showing us the price. That's all, the raw price. All right, so, uh, that would be all for this week. Nice and short. If you have again any questions, you know where to find us, guys. Thank you and have a wonderful week.
