Nashville Divergence Study Notes

Definition of Nashville Divergence

  • Nashville Divergence (ND) ≈ a “mini / smaller” version of Knoxville Divergence (KD).
  • Both ND and KD signal a likely, fast & far price reversal.
  • Divergence occurs when:
    • Price moves one way
    • Momentum indicator moves the opposite way
  • ND limitation: stretches across 3030 bars / candles or fewer.

Knoxville Divergence Background

  • KD is Rob Booker’s proprietary invention.
  • Automatically plotted by the free indicator (see next section).
  • Underlying concept: classic momentum–price divergence; Rob simply branded & packaged it.
  • Rob’s humor: credits “internet & cheeseburgers” for indicator magic.

Indicator Access & Platform Details

  • FREE download for: MetaTrader 44, eSignal, TradeStation, NinjaTrader, and more.
    • Link: http://j.mp/knox-ville
  • For any chart via web:
    • Go to http://tradingview.com → Indicators → “MarketPlace Add-Ons” → Author = “Booker”.
  • Critical user setting: Candles Back = 3030 (ensures ND detection).

Visual Identification of Nashville Divergence

  • Platform draws a red horizontal line when ND appears.
  • Line location indicates bias:
    • Below candles → BULLISH divergence → expect upward move.
    • Above candles → BEARISH divergence → expect downward move.
  • Entire divergence fits within ≤30\le 30 candles.

Why Rob Loves the “Woobie” (ND)

  • Rare pattern → fewer, higher-quality setups.
  • Historically shows a high success rate at calling reversals.
  • Performs “nicely” on longer-term charts (e.g., 44-hour), enabling multi-day trades with HUGE profit targets.
  • Personal attachment: Rob would “knit a quilt” of ND, call it his woobie.

Step-by-Step Trading Method

1. Find a Woobie (ND Setup)

  • Simply scan chart for the red ND line (remember candles-back 3030).
  • Determine divergence type (bullish/bearish) by line position as described earlier.

2. Draw a Trendline

  • For Bullish ND: draw trendline across descending candle tops.
  • For Bearish ND: draw trendline beneath ascending candle bottoms.
  • Rob’s advice: Don’t over-complicate; Google “how to draw a trendline,” practice, and stop obsessing over “perfect” technique.

3. Execute the Trade

Buy Example (Bullish ND)
  • Wait until a candle opens above the drawn trendline.
  • Enter long (buy) at that open.
  • Note: This is counter-trend; “put your big-boy / big-girl pants on.”
Sell Example (Bearish ND)
  • Wait until a candle opens below the trendline.
  • Enter short (sell) at that open.

Common Practical Questions (Left for Trader Exploration)

  • Stop-loss placement?
  • Profit-target selection?
  • Win percentage statistics?
  • Adapting ND for trend-trading?
  • Confirming indicators?
  • Scenario: price pierces trendline but stalls?
    Rob’s stance: Believe in yourself, experiment on charts, avoid over-thinking, and ignore naysayers calling traders “degenerate losers.”

Community & Ongoing Education

  • Trade Alerts & Community Chat: http://tfl365.com/plans
  • Full Course on KD & ND (monthly updated lessons):
    • http://tfl365.com/profit/landing/knoxville/
  • Quick Class: KD/ND with pivots:
    • http://tfl365.com/profit/trifecta-trade.htm
  • Rob’s closing wish: “happiness, peace & profits.”
  • Twitter: @robbooker

Ethical / Philosophical Notes & Humor

  • Rob mixes serious strategy with playful humor (e.g., cheeseburgers, woobie, big-boy pants).
  • Encourages self-reliance vs. herd pessimism in trading.
  • Emphasizes experimentation and personal adaptation over rigid rules.