Setups - Strong Trends With Magic Entries
In this section you will see real-chart examples of the trading system "Strong Trends With Magic Entries". Read more about the system
Our standard setup "H4 divergence + M1/M5 MagicEntry" occurs many times per month. You will love this setup type because it can bring you big winning trades on a regular basis.
The underlying concept behind this setup is this:
- A MACD divergence is signaled by the Divergence Scanner on H4. The divergence alone is too weak to trade.
- You activate the MagicEntry-Alert Indicator to give you an entry signal on M1 and M5 in direction of the the divergence
- Once you get a signal then you can be assured that the price is running extremely fast into the direction of the divergence.
- The strong momentum gives you a high probability for a winning trade
The following screenshot shows the details of a trade that recently occurred on GBPNZD in direction of a divergence. You can see the price level where you get the entry signal and possible stop / target level (you can define your own stop/target levels of course according to your preference):
The following screenshot shows the setup chart (H4) with the divergence. Labeled with the black arrow you can see that the entry signal was created in the middle of the very fast upward move. A good target placement could also be the descending trend line which acts as resistance:
After you understood this setup type, I'm sure that it will be one of your preferred trading setups :)
Yesterday Brown our MagicEntry-Guru did a free weekend training session with 80+ members.
He showed how easy it is to trade MagicEntry on M5 in direction of divergences on H4:
By watching the video you will also see how you can train your skills, even during the weekends. The strategy tester of MT4 and a special trading simulator (which is available free) makes it possible to gain years of trading experience within only a few hours of training during the weekend:
You can receive alerts when divergences occur with the Divergence-Alerter.
Between 14th and 19th November there were 3 buy trades on EURAUD on the time frame M5. All 3 trades were winning trades.
As you probably already know, in the analysis section on this website I provide free divergence analysis on H4 charts.
I also draw the divergence on EURAUD as shown in the following screenshot. I always only select a special type of regular divergences. The divergences that I select are those that occur during a matured trend. These divergences are showing possible reversals of the trend direction.
You can compare such divergences with a football that is hold under water. The football wants to pop up above the water line.
You can use the free divergence analysis to trade all 3 main systems that I teach: MagicEntry, V-Power and Double Top/Bottom
In the following screenshot, labeled with the black circles, you can see the areas where you can also search for entry opportunities with our Double Top/Bottom (M30/H1) Trading and our V-Power Trading System.
The following screenshot shows where the 3 successful MagicEntry-trades occurred in relation to the divergence on H4:
And now we will take a detailed look at the time frame M5 and see how these 3 trades on EURAUD could have been traded.
The following screenshot shows the first trade which occurred on 14th November:
The next screenshot shows trade 2 and trade 3. It's the same procedure with every trade:
After the blue and orange line started leading the price, then trade only the first pullback and the ride the subsequent move!
Additional hint: As you can clearly see by comparing the screenshots above, the signal of the first trade was the least strong signal. At the first trade there was no strong momentum started by an impulse move. This was indicated by the fact that the blue and orange line didn't move together with the price and then started leading the price as soon as the price made the first pullback. Read more about strong momentum trades: Article1 and Article2
Gold made a nice uptrend on M30 and gave 2 good entry signals. The entry signals are V-formations within the reversal zone which is the area between the green lines.
In the area of the big red X the trend was not indicated as strong by the indicator. Right of the big X the blue and orange line started leading the price strong. This tells you that the strength of the trend is good. During this area entries are allowed. Therefore, you could have entered after the rejection at the two green arrows.
Within the area of the small X entries are not allowed. Although the trend was indicated as strong by the blue and orange line, the two green lines (the reversal zone) was no longer there.
Two Magic-Entry opportunities on GBPJPY M5 last Friday. The downward trend gained momentum indicated by the the blue and orange line which started leading the price strongly.
The price then reached the entry zone. Within this entry zone you wait for occurrences of price spikes to the upside which are immediately rejected. Those price spikes plus the rejection for an inverted V (for short trades). Those inverted Vs within the entry zone during a strong downward trend are the Magic-Entries which you want to trade with this system.
At the bottom of the chart you see a big V-formation. This tells you that the downard trend is most probably over. Further short entries should NOT be taken. Play the odds and wait for the next strong trend.