Late day bearish divergence scalp
Caught another bearish divergence this afternoon on SPY. If you look closely, you’ll see exactly why I took this trade, I’ll try to explain as simply as I can!
Price started to drop heavily and below VWAP as well as the 200ma, when price started to recover, this is when I was looking for a divergence. At this point I’m looking for 3 confirmations.
- Rejection off either the 200ma or VWAP
- A Divergence Pattern (lower highs on chart, new highs on TSI)
- Sell signal
Once I had all three confirmations I took the trade, which is considered low risk, because my stop would be the previous high where it touched the 200ma on the chart (blue line) I grabbed $565 puts, made 30% and ended the day.
Hopefully this made sense, this is a strategy I use on a daily basis and has a very good win rate especially if you confirm everything you’re looking for.
Hope you guys made some money today, let’s end the week strong tomorrow!
Caught another bearish divergence this afternoon on SPY. If you look closely, you’ll see exactly why I took this trade, I’ll try to explain as simply as I can!
Price started to drop heavily and below VWAP as well as the 200ma, when price started to recover, this is when I was looking for a divergence. At this point I’m looking for 3 confirmations.
- Rejection off either the 200ma or VWAP
- A Divergence Pattern (lower highs on chart, new highs on TSI)
- Sell signal
Once I had all three confirmations I took the trade, which is considered low risk, because my stop would be the previous high where it touched the 200ma on the chart (blue line) I grabbed $565 puts, made 30% and ended the day.
Hopefully this made sense, this is a strategy I use on a daily basis and has a very good win rate especially if you confirm everything you’re looking for.
Hope you guys made some money today, let’s end the week strong tomorrow!