How to handle low volatility markets - Divergence University Weekly Summary - May 10th 2021

Hello everyone and welcome to another Divergence University weekly summary video. My name is Jordan, I'm the chief trader in the Traders Academy Co-op, and as you probably know if you have seen any of the previous, uh, videos, we did during the year— during the years, sorry. Uh, these videos, their goal is to basically show you what we're looking for, um, in the given specific setups, right? And basically what's our thought process. So let's go ahead and, um, check out what happened during the previous weekend. Basically in this table you will find pairs which we found interesting, which we found according to whichever directions we are looking for in the Traders Academy Club. So if you're new to the concept, basically think about it this way: you have, uh, on the very top, let's say, something which is your direction, right? And here you have a list of multiple pairs, assets, whatever. Then you have multiple strategies or methods that you're trading in this specific direction, right? So let's say euro franc, we're looking to go long. So euro franc is up, right? And whatever methods, um, I'm personally using, let's say I will be looking for euro franc buys only. Okay, something like that. So whether this is Divergence University, which is divergence trades, whether this is Delta Patterns, whether this is SRS Pro, doesn't really matter, right? We have the direction and we try to apply it into the, um, methods that we're using. Now for divergence might be a bit trickier because at least for regular divergence, right, not hidden. But for regular divergences, usually you will find trades which are at the end of the given cycle. So let's say, um, I'm looking to buy euro dollar, right, in any other strategy that I'm using. So if that's the case for euro dollar, if I get hidden divergence, I might be buying euro dollar. But if I get bearish regular divergence it means my buys are most likely ending, or my buys are now coming to a place where I need to manage my position. But basically, this divergence is strong enough, and I identify it as a divergence which might be providing a good pullback here, maybe even a reversal. You will see, uh, a divergence trade which is going against this direction, right? This is the only difference, because again, regular divergences are going against the main trend. Now there is another option here which is going with the trend on the lower time frames. For example, NASDAQ, right? Let's say, um, we're looking to sell inside the club and then you find this NASDAQ trade which is going in the given direction. But keep in mind, those could be also happening from time to time, and this is absolutely perfectly normal. So previous week, uh, starting from the 3rd up until the 7th of May, which is giving us approximately— not approximately, precisely— these, um, a few ideas here to check out, Bitcoin being one of them, uh, the sell opportunity and the sell direction. So let's see what do we have here. Push down, break out of this low, and then the price is going back. And I would say that this entire zone is a zone of support and resistance, right? But we can identify micro levels inside of it, such as this one, this one, maybe something like this, this, this entire thing, right? So more or less we can say that if this is the extreme point and this is the extreme point, this right here is much stronger than these 2 points, right? So at that moment, look where we stand. The price is coming closer, very close to the beginning of the top zone, right? The beginning of the buffer zone on the top. This is where we have the MACD divergence, MACD plus histogram, and this is also where we can see a structure which might be suggesting that we're going to see at least a pullback. Now, depending on how you read structures, if you do that at all, um, you might be looking at possible continuation. But even if you're going to be continuing up and your analysis is telling you that you're going to be continuing up, you need to see a pullback here, right? So that starts to become like an interesting opportunity in terms of the sells. Then we have EUR/CAD, which was also for the sells. Now, in terms of the structures, I mentioned that many times in the, um, live rooms that we had, but in general It's bearish, right? We cannot deny that the price is pushing lower. The structure might not be as clear as I want it to be, but we're looking at bearish, bearish trend here on the 1-hour chart. So we have no divergences against— all we do have is this double top, or a potential double top at this moment, right before any given breakout, because technically speaking, this is your breakout point. Where you're going to confirm this is double top indeed. And if it breaks, you want to be looking at the price going down, or at least you will be expecting that. Um, besides that, I guess we don't have much more to say, right? Trend divergence pattern in place. You could be a bit more conservative if you want by waiting for this low to be broken. But then you need to keep in mind, uh, that the risk-to-reward ratio is not going to be perfect near this previous swing low. Because once we break and go to this place, and this is, as we can see at least on the 1-hour chart, we don't have any, um, levels here supporting, it means this could be broken and the price drops like a rock below it. Or we have a swing point where the price goes, tests, and gives you immediate, immediate rejection. So always keep in mind, uh, when you're trading not just divergences but anything, once you reach the swing point— so you have a push, pullback, swing, right? Push here, it's debatable what we're doing, but let's say you're selling. And you go to the previous swing low, you might expect for the price to stop, uh, for a few reasons. This is the nature of support in this way, looking at it from the price being above it, right? This is also a place where many people are going to collect profits, those selling, right? And this is also a place where many people, um, who bought here, let's say they're looking at, I don't know, breakout or some stuff some sort, whatever, and they're going to be protecting here. So this is their stop loss being reached. Too many factors around these levels, and that means we're going to see the price reacting around that. Okay, so it's always a good idea to try to perform some sort of management around these levels. Not always, of course, we have different scenarios, but as a rule of thumb, keep it in mind that Uh, these levels are usually respected and you see some reaction out of these zones, right? So the conservative approach here would be leading to a bit more danger in terms of the risk-reward ratio, right? That would be the only thing here. But if you're using divergences, of course It makes much more sense. All right, Bitcoin, we saw it going further to Aussie CAD on the 1-hour chart. This is pretty much, at least in my opinion, the same setup, right? We have absolutely the same similar structures. Uh, one thing which I do love in this case is the level that we get here, this small consolidation zone which was tested again Bearish hidden divergence started forming from pretty much that level right here, and then we're going and pushing for continuing divergence, right? And we have a level, so this could be seen as, uh, maybe, maybe, maybe shallow pullback Shallow pullback. Actually, not pullback, consolidation, right? Because we don't really have a pullback. I would honestly see that as one wave, guys. Okay, now looking at it closer, I hope you can see it as well and it's not too small for you. But look at it, it's absolutely tiny, tiny, tiny pushes to the downside on the 15-minute chart. If we drop there and we want to start labeling and Trying to figure out structures there, we might be able to identify different structures. But now looking at it closely, look at this: straight push down, straight push up. At least this is how I'll be looking at it and identifying it and labeling it. So one wave level hidden divergence. In a summary, this is how I would classify it. Uh, what's next? NASDAQ, which is also pushed down. And now here, what I don't like is the level, right? So as usual, we have a trade-off. Are we going to actually reach to this zone or not? This is the breakout zone, because for me there is no level at the moment, right? There is no resistance stopping this price. This is what I mean by this Breakout zone to be reached. At least this one, right? We can see some kind of consolidation. The price stopped and it was thinking for a second right here for one or two candles. You got this big spike. Basically, I would say this is some kind of level right before the actual zone. So if the price was somewhere around this place touching that zone, etc., etc., it would make sense for Okay, yeah, the hidden divergence is massive, but you're taking a risk if you're going to be selling one wave right here without any support. It would be riskier. If it's riskier, it means you should probably decrease the risk, right? Just keep in mind it might be going to these specific levels. And last one, euro franc, the 4-hour chart. Now this is a beautiful setup. It was basically pushing to the upside and then we got into this huge consolidate. Well, it's not that huge, but when we look at it in terms of time, we stopped somewhere around the beginning of March and then all this time, look, it, it's doing nothing basically, right? It's trading inside this channel. Which means when this happens, we need to be adapting. And this is probably a good place to start looking for shorter-term intraday opportunities. Right. For this specific one, we have divergences. The price creates the false break here, then kind of a double bottom, and then it's attempting to create another false break, which it actually did with this bar. And of course, we're at the bottom or close to the bottom of this channel. Of course, we have this level right here, which is also false broken. The low overall starts to look legit that we might be looking at a push up, right? Um, that would be the logic behind it. So that would be all for this week. I hope you enjoyed this analysis, guys. If you do, thumbs up. Um, if you have any questions, leave us a comment below. We'll be glad to reply. Have a wonderful week.