 Hey guys, thanks for tuning in to urban4x.com I'm gonna discuss basically the divergence breakout strategy that Charles had requested me It's it might be a little complex to understand But if you bear with me and you practice a little bit you will be able to understand and if you have any questions There's always a comment section on the bottom You can always ask me questions over there and I'll reply to you as soon as I can Okay, so let's pull up the charts. Let's take a look at it Okay, the main factor of this strategy is diversions now One fact that I do uniquely on divergence is that on my CCI I always connect my peaks I don't connect my low ends. It's always gonna be my peaks now Let's see here. Here's an example of a divergence. We have a high here and then we have a higher high here But on our CCI we have a high here and then a lower high So you can see that right there is a divergence The market is saying something different from what the indicator is saying and that is a sign of a reversal okay But here's how to even filter it out a little bit better on how you can make it work In an uptrend on the price always connect your bottoms and A downtrend in the price always connect your tops on the CCI Just connect your tops at all times Okay. Now, let me show you how this strategy works. Okay, we're in a clear uptrend here, right? Okay, we went high here. The market went high market came down So did this thing it came down and then at this level here where you see this big blue Stick right here. What did the market do it crossed above our level here? So this was our signal line with saying that okay. This is where the divergence started what we're gonna do now is wait for a Bounce what a bounce means is that since this it went up over here We're gonna wait for the next bar to be below the highest of this bar So you can see when this blue bar opened up it was lower than this one Okay, once you get this signal indication, I'm gonna put a line right there once you get this indication that means Start connecting your lows or your highs Okay, so since we were in an uptrend we're gonna connect our lows. We're gonna take my trend line indicator I'm gonna connect. Here's the lowest point to a lowest point here Okay, nice little uptrend right there. How do we take this entry the break once it breaks through the? trend line at the close at the close of the candle and the opening of the next candle you would open a short right here and It would go on for so forth. Now. Where would you put your stops? Since since this is a medium Medium-sized uptrend I would put my stops couple candles back Which would be this one and this one back on the high of this candle if if for example Just for example if the trend line was like this Where it's not so steep, then I would keep the stop at the high of my breakout candle Okay, and if the candle is very steep It's something like this then I would I would keep my my stop on the highest possible Swing high the closest to the trend line the swing high Okay, so that pretty much concludes on how you can trade this divergence Breakout strategy again. It's mostly price action. You were just using the CCI just to see divergence We're not following up or down through the CCI nothing like that, okay? Again, if you have any questions, just let me know on the bottom of this page. Thanks a lot for tuning in. Bye. Bye