Posts Tagged ‘divergence’

In technical analysis, divergence is seen as an early warning sign. It happens when your price says something, but the indicator says something else. For example, look at this little chart. The price is making new highs, but the indicator below is making lower highs. So, convergence will be in the same direction, and the divergence is in the opposite direction. You can use the RSI and the MACD indicator for observing divergence […]

In this video, you will learn a forex trading strategy using RSI divergence. You will learn how to spot divergence using the RSI indicator and use it in your trading. The RSI is a momentum indicator used to gauge the strength of the market by using a certain number of candles for calculation. The default setting is 14. You can adjust this setting based on how sensitive you want this indicator to react. The RSI […]

In this video, you will learn how to trade using divergence. Divergence happens when the price and the momentum indicator reading starts to diverge. For example, look at this chart. Initially, the price rises and the MACD histogram rises with it. At some point, price makes higher high, but histogram makes lower high. This indicates that the momentum is slowing down. You can also observe divergence using other […]

In this video, you will learn about divergence in forex trading. If you are looking for a reversal trade, then you need to learn about divergence. You need to use a leading indicator to identify divergence. So, you can catch a new trend at the earliest point and maximize on profit. There are two types of divergence observed on the chart. Bullish divergence occurs when the price makes a lower low in a downtrend, but […]

Forex traders were betting heavily on a higher dollar due to the US Federal Reserve raising Interest rates. When the most recent Fed Meeting ended with a promise of a slow rate increase or none for now many Forex traders were caught in losing positions. The diverging interest rate policies of the US Federal Reserve and most other central banks is driving higher Forex volatility than seen in years. Volatility in currency […]

Price Oscillator divergence is a term for changes in price momentum based upon differences between price and oscillator. Divergence is an imbalance or disagreement where extremes in price and an oscillator diverge in relative direction. Used primarily as a warning or confirmation of a significant potential price event, usually either a turn or reversal in price. Divergences are support trading decisions that are derived from other technical or fundamental trading methods. They add rationale […]

In this video we will learn about Bullish, Bearish and Extended Divergences using the RSI(Relative Strength Index) indicator. Bearish Divergence occurs when Price makes higher high and RSI indicator making lower high and it indicates loss of momentum and a possible bearish Price reversal. Bullish Divergence occurs when price makes lower low and RSI indicator making higher low and it indicates a possible bullish Price reversal. […]

In this video you will learn about the difference between regular and hidden divergence, how to choose a proper divergence indicator and how to use it. The regular divergence is subdivided in to Bullish divergence and Bearish divergence. Bearish divergence occurs when there is a trend reversal from up to down, i.e. when there are lower highs in the oscillator and higher highs in price. Bulllish divergence occurs when there is a trend […]

This is a Forex strategy based on Pivot points and MACD divergence.

This is part 2 of the series. This part explains how to exit a Zig zag and a RSI reversal trade. This method of exit is easy as it is based on the finding the opposite divergence.