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The Stochastic Divergence TB indicator is a show me study for Tradesation used to capture potential turning points in the markets. It can be used to trade futures, forex, stocks, and cryptocurrencies taking long and short signals signals on multiple time frames.

The Stochastic Divergences looks for incremental changes to occur in the indicator before the change occurs in price. The indicator is a show me study that plots blue dots at the low when there is Stochastic Diverence indicating the market may begin to move higher. The red dots are plotted at the high of a bar when there is an indication the market could move lower.

Using the Stochastic Divergence show me study with a support and resistance indicator such as the VWAP is one of the setups that we focus on.


We highlight some of the recent trade setups in the Nasdaq futures for long and short trades on March 15 and March 18. On Friday March 18, the Nasdaq futures generated 3 Stochastic Divergence Lows on a triple witching Friday. The final divergence of the day was at 1:00 pm EST, using one minute charts with the VWAP bands that are included in the Tradestation platform. The market put in a rally into the close to trade back to its midband.

One Monday, March 18, there was an early Stochastic Divergence high that was generated into a rising VWAP UpperBand. Waiting for the UpperBand to flatten out gives a better short entry on this one minute chart setup.

What is notable for Stochastic Divergences is the trend indication that is counter trend. Many times we look for long trades as the market is rising or short trades as the market moves lower. This is a counter trend setup that can be ideal for mean reverting, counter trend market environments.

E-mini Nasdaq Long and Short Trades
Bitcoin Futures Long and Short Trades

Micro Bitcoin futures is a very active market with less liquidity. This market can generage many signals in one day since it is less liquid. It is also less efficient. We highlight several turning points in less than one session in the Micro Bitcoin futures markets.

On one minute charts on Monday, March 18, Bitcoin futures, reverses its trend five times based on the Stochasic Divergence show me studies. We prefer to use this to line up long trades and the LowerBand and short trades at the UpperBand in the VWAP indicator.  

Shorting AAPL and NVDA

On Monday, March 18, 2024, we observe stochastic divergences near the highs of the day in NVDA and AAPL as these markets move lower. This show me study can help define the trend based on these divergence moves in anticipation of a reversal. On Friday, there were blue dots signaling higher prices as the market did move higher during the day on Friday after the blue dots were generated.

We observe this on AAPL and NVDA on 15 second charts as well as Nasdaq futures. Setting this up on multiple markets and timeframes for similar markets can help line up reversal trade entry points.

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