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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. #51
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    Another thing I've noticed is that this manner of trading can work well with the right currency pair,and again when fundamentals support the given currency that shows sign of price divergence,its also important to also compare the strength and weakness to other currency pair before making an entry,I've worked with this strategy,but its very time consuming due to the fact that you always have to keep an eye on the chart for entry

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  3. #52
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    This indicator is a bending type of trading indicators, It will see the market bending and the direction at the same time. That is why you are seeing the zig zag trading nature with it. In trading divergence trading types, you need to follow the type of bend you see on the chart, do not think hat it is because the market is trending, this should not stop you.

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  4. #53
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    Many things are hidden to the forex trader on this, i love to use the divergence trdaing system at times. But a thing now came to my mind now, If a trader is using the price action trdaing ways , and an indicator that will make signal on the curving of the market; like the case of divergence indicator, i think that things will be better.

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  5. #54
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    Quote Originally Posted by cozard007 View Post
    Many things are hidden to the forex trader on this, i love to use the divergence trdaing system at times. But a thing now came to my mind now, If a trader is using the price action trdaing ways , and an indicator that will make signal on the curving of the market; like the case of divergence indicator, i think that things will be better.
    price actions and divergence are different things but it doesn't mean that we can not not use different strategies and combine them to one for confirmation or so,i use divergence trading all the time and i also depend on support and resistance levels in order to confirm my trading signals and whether i should believe them or not.

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    Bend your view to the charts, not the charts to your view

  6. #55
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    be good also when we want to compare and choose the merchant where a good and where there are gaps in the tools of our trad, when we already know where the gaps and find the proper rules for indicators that we use, a few months ago i was also put on RSI but i combine with the ichimoku its pretty good results.

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  7. #56
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    I do not use any indicators, I think you only need to follow a schedule

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  8. #57
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    divergence is good and it is used by many traders around the world and i think it is better with MACD than any other indicators,i did not trade with it before and i find some traders trade with it and they get good results and some traders could not continue with it and they did not get good results with it so i think it should be used with other tools to get confirmation signals for entry positions and exit positions

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  9. #58
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    Quote Originally Posted by forex-trader View Post
    I do not use any indicators, I think you only need to follow a schedule
    well so what is the schedule you follow and what is your result? A lot of forex traders are now claiming to trade without indicators and this not too good, because there will be less expert traders if new traders begin to think that they do not need to workhard or learn how to properly trade.

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  10. #59
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    my dear friend, can you please explain about hiden divergence, it is so interesting for me, and in facts, the market always show this situation where indicators show a different thing with the reality, what condition and situation then it happens in the market ?

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  11. #60
    Trader Nizar's Avatar
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    Quote Originally Posted by jonking View Post
    well so what is the schedule you follow and what is your result? A lot of forex traders are now claiming to trade without indicators and this not too good, because there will be less expert traders if new traders begin to think that they do not need to workhard or learn how to properly trade.
    you only use indicators if you are a technical trader but if you are a fundamental trader your use of indicator will be very limited actually some traders rarely even look at the chart and all they look at is the price and then they check the news and market sentiment and make they decisions to buy or sell according to they fundamental analysis.

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