Thomas Wood | MicroQuant Divergence Trading Pivot Trend Setups · 2015-12-02 · Trading Micro Trends • All a micro-trend is doing is identifying consolidation points within the

Divergence Trading

Workshop

Day One

presented by

Thomas Wood | MicroQuantSM

Pivot Trend Setups

Risk Disclaimer

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What Settings to Use with MQ Pivot

Trend

Reading the MQ Pivot Trend Indicator

• The MQ Pivot Trend plots a green dot on the pivot if we have an up trend.

• It will plot a red dot on the pivot if we have a down trend.

• And If we are not in a trend, so we are in consolidation or reversing, it will plot a blue dot on the pivot.

Reading the MQ Pivot Trend Indicator

Pivot Trend Settings

• There are two settings that you may need to adjust with the MQ Pivot Trend, these are “Left Strength” and “Right Strength”

• The left strength setting will determine how many bars up/down the market will have to go on the left side of the “mountain”

• The right strength setting will determine how many bars up/down the market will have to go on the right side of the “mountain”


• For 5min charts I like using a 3/3 setting • For 2min charts I like a 5/5 setting • Longer timeframes I prefer using a slightly

shorter setting, such as 2/2 or 3/3


• If we adjust the left strength to a lower number, we can catch smaller bounces for trailing our stop in fast moving markets.


Bullish Engulfing – Bullish


• The best way to determine what setting to use for each market and timeframe is, once you have learned the setups in today’s workshop, go back and look at how many of the setups occurred. If you see them happening, then your settings are correct, if you cannot see any of the setups, then you need to adjust your settings.

Trading Micro Trends


• All a micro-trend is doing is identifying consolidation points within the context of the underlying trend.

• The ideal micro trend, within the context of a down trend, is going to have a red pivot, followed by a higher low blue (neutral) pivot.

• Once we see this higher low pivot, then we draw a trendline connecting the red pivot to the blue pivot. This provides our breakout entry point.


• Our first entry opportunity occurs 2-5 ticks below the trendline. The reason we do not enter immediately after the trendline is broken, is because we want to avoid a run on the stops.

• The second entry opportunity is on the break of the neutral support created from the higher pivot low. Many times this will be within 1-2 ticks of the first entry opportunity.





• A micro trend can also occur within the context of an overall up trend. Ideally we will have a green pivot, followed by a lower blue (neutral) pivot.

• We trade this the exact same way we trade the micro trend within the context of a down trend. Wait 2-5 ticks on the trendline break, or enter on the break of the neutral pivot.





• DO NOT CHANGE INDICATOR TO AGREE WITH YOUR IDEA OF SETUP!

• We do not want to look at a chart, then go “there should be a pivot there for a trade!” and adjust the indicator until we see a pivot, then justify the trade to ourselves because the indicator showed it. Find your settings while you are not trading, then do not change the settings.

Questions on Trading Micro Trends?

Trading Long+Short Term Pivots

Intro to Candlesticks

• One great way of identifying short-term consolidation within the context of an overall trend, is by adding two copies of the pivot trend indicator to your chart.

• Then adjust one set of pivots to short-term (3/3, 2/2) and one to longer-term (5/5, 6/6)

• It is also easier to identify the breakout setups if you change the colors of the dots being plotted.

Intro to Candlesticks

• Watch larger pivots for underlying trend and for significant support/resistance. Then use smaller pivots for breakout entries within the context of the underlying trend.





Questions About Long+Short Term

Pivots?

Documents

Thomas Wood | MicroQuant Divergence Trading Pivot Trend Setups · 2015-12-02 · Trading Micro Trends • All a micro-trend is doing is identifying consolidation points within the