5 TICK Divergence Setups – Over 23 S&P Points
Friday was a great day trading the TICK divergence setup. ZoneTraderPro uses the $TICK to filter trades. The $TICK is a measure of actual buyers and sellers at the NYSE. In the following example from Friday the $TICK made a high on the previous move of 615. TICK divergence occurs at the next blue counter trend zone when the ES makes a higher high but the $TICK can only make a high of 504. Additionally, what makes this pattern even better is that it also occurs at a Exhaustion trading pattern, so the typical risk is about 4 ticks. The trade was good for 4 ES points. Very nice that the US Dollar turned negative while the market was trading at the high.
Next in the period of one hour we see 2 more TICK divergence setups. All 3 of those were also Exhaustion trades. What is absolutely fantastic about all three trades is that ZoneTraderPro nailed the exact entry point in each trade and the trades did not have adverse excursion. The trades total profit was 12 points. There is also a trading lesson to this picture. Note that after the 1st TICK divergence trade, there is an Exhaustion trade, that does not lose, but does go against you. The TICK was a lower high at 135, and going into the trade it was a lower low, so there was nothing good about this setup. If you waited 10 minutes, you were handed a 3.75 point winner, for the same 4 tick risk. What’s the better trade?
The next trade has TICK divergence at the blue counter trend zone, but it is not an Exhaustion pattern. ZoneTraderPro software is being updated to include this TICK divergence pattern. Updates to the software are always free. What is nice about this trade is the winning Exhaustion patterns preceding and following the trade. In the second Exhaustion pattern we see the market making a matching high, without a higher TICK, giving you a very good reason to take the trade. Note the exit of the trade, 1 tick short of the blue counter trend zone. The TICK divergence trade was good for 7.5 S&P points with no adverse excursion.
In each of the TICK divergence trades the market traded from blue counter trend zone to blue counter trend zone. ZoneTraderPro develops that blue counter trend zone in advance of the market trading there.
More TICK Divergence
At about 2:40 EST time we have a perfect setup for a Trend Trade which was good for 2.25 more points. Again ZoneTraderPro painted the profit target zone in advance of the market trading there, and as noted in previous posts, there is a 50% chance that the market will go no higher than that zone. Next you see the TICK Divergence which is good for another 6.75 points and no adverse excursion.
Later in the day we see another group of successful Exhaustion and Trend trades. There is one addition TICK divergence pattern that breaks the rule by just a single tick.