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Thread: Divergence

  1. #1
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    Divergence

    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 ----------

    Attachment 25

    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. .

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  2. #11
    Registered user martyn's Avatar
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    divergence in my opinion is a market condition that is really difficult to predict. because usually there is no indicator that can provide accurate signals when the divergence occurred. divergence is a continuation of the movement of the breakout, where we may suppose that the market has made a point of support or resistance, but the point is only temporary

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  3. #12
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    Quote Originally Posted by jomks View Post
    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 ----------

    Attachment 25

    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. .
    I can only say thanks for this thread because divergence is new thing for me to learn in forex business before that i not know any thing about divergence in forex trading,that's the reason i like to work on forex forums because it will help me every day to learn some thing new about forex business which improves my daily trading..

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  4. #13
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    I think it is some intelligent step to take to know the trend of the market and i think to over come the confusion and take the safe step to know the maximum the market is beehive today , or tomorrow ans when market is back to the position and i think first of all insure of our account safety then take the step.

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  5. #14
    Trader rinaji's Avatar
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    Quote Originally Posted by mark48 View Post
    I can only say thanks for this thread because divergence is new thing for me to learn in forex business before that i not know any thing about divergence in forex trading,that's the reason i like to work on forex forums because it will help me every day to learn some thing new about forex business which improves my daily trading..
    Divergence technique is a technique that had become my favorite in forex trading, because it gives a high level of accuracy. But you should really manage risks closely, because there are moments that could be fatal for you in using this technique, I have experienced badly in using this technique, the technique does not always work when there are high impact news.

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  6. #15
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    Divergence is most popular indicators used by forex traders. I prefer MACD (divergence indicator) which is really good for its simplicity to inform about the trend and or momentum. It become easy to trade market effortlessly for short term and day traders by using divergence and even for position traders.

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  7. #16
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    In shortcut Divergence is usually aforesaid to be number in one indicator. Divergence is worthy action measured in relationship to varied indicators id EST, MACD, Cci, RSI, stochastic etc all. Or in relating to a different instrument or law of the market like tick.

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  8. #17
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    I am not a bit of fan of divergence trading, I guess this is mainly because it is too slow. Divergence don't necessarily come very often and are usually abnormal price with Divergence movement ( different price from indicator)

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  9. #18
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    Divergences are really leading in nature, this si why we must be careful of using it in the lower time frame, if you are using it in the lower time frame , you might not be sure when the market will move at the whole trend o the day, in this case, if you want the better shot on this, make sure that you use it on the 1 hour trading chart at least, this gives the best.

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  10. #19
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    Finding the divergence can be really easy task if you combine trend and MACD indicator and use it and check if both the trend lines and MACD are forming same trending divergences and then you can open up a trade with minimum risk:reward of 1:2

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  11. #20
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    Divergence is good to pick when we are able to point the high or low pick i mean it is great when we will be able to level this substantial decision or even lower . Actually it is a strategy to make good profit .To get the best result it is better to trade with MACD indicator As it is problem free . It is also good and helpful for the newbie as well for the scalper trade who trade very shortly .

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