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.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.
7. 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.
8. 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…
9. 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.
10. 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.
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.
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