Divergence Trading works and it works better when you look at divergence between price and actual buying and selling volumes rather than divergences between price and indicators derived from price
Below are 4 charts that show the divergences between price and order flow that provided prrecise entries at each of these 3 local extremes.
The indicators reflecting the divergences below are all based on order flow/balance of trade and are from this package of indicators.
This first shot shows a double positive divergence in ES and was taken this morning. All times are PST.
Here is a top noted by negative divergence between price and V94Window.
This graph shows a divergence between V94Window and also shows a bottoming spike from The Velocity of Commercial Trade.
Here is another top reflected by negative divergence between price and V94Window.
Below is copyrighted text taken from "Practical Short Term Trading - Techniques & Technologies" that is reproduced here with permission from the author.
Three True Descriptions of the
Price/Time/Volume Continuum are:
"As Price changes or not and Time passes Volume happens/accumulates.
As Time passes and Trade/Volume happens Prices change in Direct Proportion to the degree to which that Trade is Imbalanced.
As Time passes and Trade/Volume happens Prices change in Inverse Proportion to the degree to which that Trade is Balanced."
Cheers
UrmaBlume
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