Method

How it works

Everything on this site, in plain English.

The process

Six steps

We read the market

BTC candles on daily and weekly are pulled every two minutes and MACD is calculated on each.

We look for disagreement

When price makes a new extreme and MACD does not, that pivot is flagged as a divergence.

We check RSI

If daily RSI (14) is below 40 at the confirming bar, the setup is skipped outright.

We check the conditions

Divergence strength, counter-trend stretch, weekly agreement and volume are weighed together.

We wait for confirmation

Nothing is published until the complete long-side rule set passes. Most of the time the engine is simply monitoring.

We manage the position

Stop beyond the 20-bar swing. At +5% the stop moves to entry, then trails 5% under the running high. A 45-bar limit closes anything that stalls.

The five states

Engine

Waiting for a setup: Nothing is forming. This is the default state and it is where the engine spends most of its time.
Watching conditions: Some conditions are aligned but not enough of them to confirm a setup. Monitoring information, not a trade.
Setup confirmed: A long-side daily divergence passed every production rule. This is the only state that publishes an entry, stop and reference target.
Position active: The entry window has passed and the rule set is holding the trade. The page shows management levels, never a new entry.
Closed: The trailing stop, the original stop or the 45 day time limit ended the trade, and it moves into the track record.

Reading the conditions

Checklist

A setup is either on or off. It needs a bullish daily divergence and daily RSI (14) at 40 or above, backed by enough of the other conditions. Anything short of that is monitoring information, never a published trade.

Bullish divergence
Price makes a lower low while MACD does not. Required.
RSI filter
Daily RSI (14) at 40 or above at the confirming bar. Required.
Counter-trend stretch
The setup fades a stretched move below the 200 EMA, where this pattern has worked best.
Weekly agreement
The weekly chart shows divergence in the same direction.
Volume confirmation
Volume backs the reversal.

The rule book

4 rule sets

The engine monitors one setup at a time. While a trade is open, new signals are evaluated but not published until the current trade closes.

Regular divergence, counter-trend

Price makes a higher high while MACD makes a lower high (or the mirror at lows). The setup scores highest when it fades a stretched 200 EMA trend rather than agreeing with it.

Best for catching turning points after an extended move.

Counter-trend filter

Not a separate entry, but the rule that now gates every other one. A divergence taken against the 200 EMA scores the full 27 trend points; one that agrees with the trend scores close to none, because in the replay the counter-trend version won far more often than the trend-aligned version.

Best thought of as the reason a setup is high or low score.

Multi-timeframe divergence stack

The same divergence direction on daily and weekly. Rarest and highest scoring pattern in the model.

Best for larger, slower swing positions.

Hidden divergence, trend continuation

Price makes a higher low while MACD makes a lower low, which reads as a pullback inside a move rather than a top or bottom. Scored on the same 100 point scale and managed the same way.

Best for buying dips inside an established Bitcoin uptrend.

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Glossary

Plain English

MACD: Two moving averages compared against each other. When they pull apart, momentum is building; when they close in, it is fading.
Divergence: Price makes a new high or low but MACD does not follow. It means the move is running out of fuel.
Hidden divergence: The mirror pattern, read as a trend pausing rather than ending: price makes a higher low while MACD makes a lower low. It is traded alongside regular divergence and is where most of the extra setups now come from.
Entry, stop, target: Where to open the trade, where to accept the idea was wrong, and the reference level the setup aims for. The target is not an automatic take profit: exits come from the trailing stop.
RSI (14): A momentum reading from 0 to 100. A setup is skipped whenever daily RSI (14) sits below 40 at the confirming bar, even if every other condition is met.
R:R: Risk to reward. 2.0x means the target is twice as far away as the stop.
Trailing stop: A stop that follows price up. Once the trade is 5% in profit the stop moves to entry, then stays 5% under the highest price reached, so a strong move keeps paying.
Counter-trend edge: How far price sits from the 200 day average when the divergence confirms. Setups that fade a stretched trend count strongly; setups that simply agree with the trend count very little.
200 EMA: A long moving average used to read trend position. Divergences that fade a stretched trend have historically been the stronger version of the setup.
Setup on: Every rule has passed at a daily close. Only then are entry, stop and target published.
Worst setup: The largest loss any single published setup finished with, measured from entry to exit.

Setups Trade log