Hello, everyone!
Last time I promised you to show my trading history during all bear market on the BTCUSDT chart of the WhiteBIT exchange. I think it will be useful information for you because I forwardtested the divergence strategy on the 4h and 1D timeframes and now can make a conclusion about it. I will give you here briefly the signal’s description for every trade and describe my mistakes and the emotions which I felt. If you are interested in you can easily find the corresponding article in my blog here in TradingView. Let’s get started!
1 Told you that it’s bear market, but didn’t believe to myself
It was the beginning of bear market, the mood was so bullish, every drop was interpreted as a correction, we will definitely 100k very soon. At the same time I received the true bearish divergence with MACD – this is the trend killing signal, but I did not believe and ignored it. After that I regretted many times that have not shorted the Bitcoin.
- Perfect local long with the prefect exit
After the huge drop at the beginning of December, I knew that the Bitcoin will 100% creates the bull trap. I waited for the MACD divergence on the 4h timeframe and enter the long position, moreover, I closed it exactly at the top of the further created bull trap. It’s my favorite trading pattern. I was really happy that did not missed even a bit of bullish move. - Good short trade
When bull trap was created + 4h bearish divergence, I shorted Bitcoin, bit took only 10% move. I was upset that did not hold this short more. - Failed long
It was the long signal according to the bullish divergence on the 4h. The signal failed but I didn’t regret because I had 2 profitable trades before. - Failed long on the 1D
Here was the divergence with MACD on the 1D timeframe – extremely strong signal. I supposed that the market could reverse from here and give me 25%+, but the price demonstrated only the 10% from my entry point, it was not sufficient for me, I felt greed and annoyance that the market finally wend against the strongest signal, which in 80% of cases works perfectly. - Perfect long on the 1D
It was the brilliant trade! The bullish divergence with MACD on the 1D played out perfectly. I received +25% gain. Moreover I closed trade almost at the very top according to the bearish divergence with MACD. I was very proud by my new trading skills, but my teammate from Skyrex told me that I have the psychological problems in trading because I am too emotional, but I didn’t want to listen him. - Two losing trades on the 4h
I don’t know why I did now shorted the market when closed the previous trade, but I decided to execute long trades when saw the 4h bearish divergence. I got stop losses twice, but they were too tight to make me nervous after such profitable trade. But here was the offensive thing, I missed the profitable long at the very bottom because did not want to lose again. - Small profitable long
It was the trade based on 4h bullish divergence, which was closed randomly, but again at the very top. As I remember, here I became more popular at the TradingView and I got a lot of new subscribers which wrote me the grateful comments, but here was the beginning of the end… - Multiple fails in attempts to short the market
I was 100% sure that the bear market will continue, my next target was 26k and I wanted to become the genius who will take this move from the very top to the very bottom, but I wanted to do it with the tightest stop loss, that’s why I used 4h timeframe to find the divergence. Here I understood that 4h timeframe is not the appropriate timeframe for MACD divergences. I got 4 stop losses in a row and did not want to trade anymore. I remember the words of my teammate about my emotions addiction. I was really upset, suppose right here I became a little bit depressive. - The most offensive mistake
I missed the perfect short on the 1D divergence signal and it was because of last 4 losing trades. This trade could bring me +60% while the flow of blood on the market, but I was unlucky. I should sitting in short trade till today, guys! Can you imagine how it is offensive for me? After that a ton of haters appeared on the channel, I knew that now is a markdown phase, but tried to catch any bounce against the trend. I had the nice entry points, but the bounces were not sufficient for me.
Conclusion
A couple of days I decided to end the experiment with the divergence trading, I wanted just test the strategy but received the valuable experience. Now my depression is over, and I am motivated to learn new approaches in trading, I am doing it right now. I can conclude also the following:
4h divergences are not so good, I am not going to use it anymore without any other tools.
1D divergence is a holy grail, but flash the rare signals
Don’t try to catch the bounces on the falling market
I am going to research about the 1-4h trend continuation trading strategy, I have also have the ideas
You can catch the bottom only on the 1D+ timeframes, use 4h- timeframes only if you are waiting the signal on the 1D.
Guys, I hope this article was useful for you, if yes please give me your like and give me your comment about your experience with the divergence trading.
Good luck!
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