TRN Bars & TRN Divergence
By combining the TRN Bars and TRN Divergence, you unlock a powerful synergy that enhances the accuracy of signals. This effect becomes particularly pronounced when these signals manifest within significant support and resistance zones.
Be sure to check out our TRN Bars and TRN Divergence section to fully understand how to spot and trade these signals properly.
How To Trade TRN Bars & TRN Divergence
1. Identify The Setup
Add TRN Bars and TRN Divergence to your chart and look for bullish and bearish regular and hidden divergences on the asset and time frame of your choice. You can also use the build in divergence detector of TRN Swings to look for divergences. When you have found a divergence, look for a signal bar, such as a reversal or breakout bar, as the subsequent swing forms.
These signals are strongest when they appear directly at important support or resistance zones.
2. Wait For Confirmation And Place Your Order
Exercise patience and wait for the signal bar to complete its closure, as it is only at that point that the signal can be deemed confirmed. Once confirmed, take immediate action by initiating a trade, setting your entry near the closing price of the signal bar.
This applies specifically to scenarios involving a blue reversal bar or a bullish breakout bar subsequent to a bullish divergence. In the case of a bearish divergence combined with a pink reversal bar (as depicted in the illustration below) or a bearish breakout bar, opt for a short trade and enter near the closing price of the bearish signal bar.
3. Set Stop-Loss And Take-Profit Levels
In the case of a long trade, it is recommended to place your stop-loss order just below the low of the signal bar. As for the take-profit level, consider targeting a nearby resistance level or utilize double the height of the signal bar as a potential target.
On the other hand, for a short trade, it is advisable to position your stop-loss order directly above the high of the signal bar. As for the take-profit level, aim for a nearby support level, as illustrated in the example, or alternatively, you may choose to use double the height of the signal bar as a target.
Enhance the precision and effectiveness of your stop-loss and take-profit orders by leveraging the Swing Statistics feature in our TRN Swings tool. Visit our How To Use Statistics section to gain valuable insights on how to utilize this tool to its full potential.
4. Monitor Your Trade
Once you've entered the trade, monitor it closely. Adjust your stop loss and profit target as the price moves, and consider exiting the trade if the price starts to move against you.
You can use the TRN Bars to monitor your trades. Look here if you want to know how it works.
Signals from TRN Bars and TRN Divergence are not always reliable. There are many other factors that can affect the price of a stock or other market. Additionally, it is important to consider your own risk tolerance and investment goals when making any trades.