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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. #21
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    Divergence is good help to predict the end of wave if you ride elliott waves and they often tend to look for breakout out of crucial swing to confirm the top or bottom or use trendlines to trade divergences and this is the most easiest techniques of trading and should be used with proper risk managment and price action with the use of MA and I think you dont need any other help if you can trade divergence carefully

    regards

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  3. #22
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    Quote Originally Posted by fxaddictor View Post
    Divergence is good help to predict the end of wave if you ride elliott waves and they often tend to look for breakout out of crucial swing to confirm the top or bottom or use trendlines to trade divergences and this is the most easiest techniques of trading and should be used with proper risk managment and price action with the use of MA and I think you dont need any other help if you can trade divergence carefully

    regards
    Huh? really? Well, i'll tell at the first that i didn't know much about divergance. But from what i've read about this message, i think that divergance have some correlation with the indicator and i truly felt that you won't be able to make some profit only with some indicators.

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  4. #23
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    I really like divergence trading especially with MACD indicator as it filters the trades.
    Moreover, i only trade when i see a good opportunity trade that is, when i clearly see a price action in that region means a good candlestick reversal pattern indicator and also a near support and resistance. If all agrees theni buy/sell :)

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  5. #24
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    I am not a very big fan of divergence but it can be a good trading method to be used in your trading. You require some other indicators or methods to confirm an entry, just alone divergence can give you false entries at times. As price may make another higher high or lower low after divergence.

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    Train insane OR remain the same

  6. #25
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    i also like very much thei s divergence trading in Forex and this trading style is very helpful for many traders and investors in this field mostly professional trader can enjoy good earning in this trading system. if we not make false entries and only trade with strong strategies and analysis skills it's lead us to profit in short time also we should beware trading against the trend and very fast movement of market.

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  7. #26
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    I think this system is working very well when we point the high pick or low and i think it show the good result if we properly use it well and i think it seems to difficult but if we properly study the system and then we will be able to reduce the risk
    in the trading.

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  8. #27
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    Divergence is one of the best tools available to all forex traders. It is very useful for the swing trader and also the day trader. Divergence is also easily indicated by a number of technical indicators whic makes trading easier. I normally use divergence in the 4 hour and daily chart where it is more significant.

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  9. #28
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    When we talk about divergence then we need to familiar with MACD (Moving Average Convergence Divergence) which is a good indicator here. I believe a lot of traders already heard about this indicator and tried it before. Please share your result here.

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  10. #29
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    Quote Originally Posted by topman View Post
    When we talk about divergence then we need to familiar with MACD (Moving Average Convergence Divergence) which is a good indicator here. I believe a lot of traders already heard about this indicator and tried it before. Please share your result here.
    of course we heared about this indicator,it is one of the basic indicators any newbies start learning technical analysis with,in my opinion this indicator is a strategy in itself and you can lose it alone with no other indicator and still get very good signals and winners trades more than losing one,it is a very useful indicator indeed.

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  11. #30
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    Quote Originally Posted by jonking View Post
    Divergence is one of the best tools available to all forex traders. It is very useful for the swing trader and also the day trader. Divergence is also easily indicated by a number of technical indicators whic makes trading easier. I normally use divergence in the 4 hour and daily chart where it is more significant.
    It's interesting how do you use it.

    For me, trading is not about prediction a reversal, it's about managing risk.
    Trying to trade-off a reversal with divergence or any other tool, often ends up poorly

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