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Thread: Divergence

  1. #1


    Divergence is often said to be a leading indicator.

    Divergence is price action measured in relationship to various indicators ie., MACD, CCI, RSI, Stochastic and others or in relationship to another instrument or measure of the market like Tick.

    There are 2 basic types of Divergence :

    > Regular Divergence- RD

    1-Price is making higher highs while the indicator is not

    2-Price is making lower lows while the indicator is not

    > Hidden Divergence- HD

    1-Indicator is making higher highs while price is not.

    2-Indicator is making lower lows while the price is not.

    ---------- Post Merged at 09:27 PM ----------


    Bearish Divergence :

    ● Price makes two significant
    highs. The second is higher.
    ● RSI makes two significant
    highs, but the second is lower.

    Bullish Divergence :

    ● Price makes two significant
    lows. The second is lower.
    ● RSI makes two significant
    lows, but the second is higher. .

  2. #2
    Quote Originally Posted by jomks View Post
    Bearish Divergence :
    Bullish Divergence :
    It's just a convergence and divergence.

  3. #3
    Join Date
    Mar 2013
    This system is good when you are able to point the high pick or low.... I tried it few month back , primarily it shows good result but later I failed.
    what I realize that this is a hard trading task! I got a lot psychological pressure :)

  4. #4
    This technique is usually great when you'll be able to level this substantial decide on or even lower.... I experimented with that several 30 days rear, largely that demonstrates great effect although after I was unable.
    exactly what I know that it is a challenging dealing job! I got a lot subconscious strain: )

  5. #5
    Registered user mohamed reda's Avatar
    Join Date
    Aug 2013
    yes trading with divergence will be the most popular way or strategy to make profits in my opinion i prefer to trade with divergence using the MACD indicator it is the the best indicator to trade with divergence in my opinion also it will work with out any problem if you are trading with scalping with 5 minutes time frame so you can use this strategy as a beginner trader.

  6. #6
    Its a intelligent step to take basically when market going a confusion position or more wort position over safe step to take we know maximum time today or tomorrow market back previous position so firstly insure you account safety then doing something better.

  7. #7
    Yes, jomks, you're right. There are 2 types of divergences here. The first one is called hidden which means reversal.
    And the second one is called regular, which means its just retracement and then it would be continued again. I use MACD for divergence with trend line also in small time frame.

  8. #8
    In vector calculus, divergence is a vector owner that actions the scale of a vector field's resource or drain at a given factor, with regards to a finalized scalar. More officially, the divergence symbolizes the quantity solidity of the external flux of a vector area from an infinitesimal quantity around a given factor.
    For example, consider air as it is warmed or chilled. The appropriate vector area for this example is the speed of the shifting air as a factor. If air is warmed in an area it will increase in all guidelines such that the speed area factors external from that area. Therefore the divergence of the speed in that area would have a beneficial value, as the area is a resource. If the air cools down and agreements, the divergence is adverse and the area is known as a drain.

  9. #9
    to be honest, i have no idea how to manage my trade by seeing divergence. Im not oscillator-type Indicator user by the way. I do use Indicator, but only 3 Moving Average. Follow the trend is still better than me rather than finding good spot to counter it

  10. #10
    From what i learning, a divergence is a leading indicator, it can be tracked by comparing a currency’s price movement and the changes in an indicator. Any indicator can be used for it, so it is advisable to use the one that you are most comfortable with. The really nice thing about a divergence is that it is easy to spot and can be used to indicate future price changes. Since divergences work near the highs or lows of a currency price, there is very little risk involved.

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