How do I use Divergence in my trades
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Thread: How do I use Divergence in my trades

  1. #1

    Lightbulb How do I use Divergence in my trades

    How do I use Divergence in my trades


    what is Divergence:

    It is a difference in behavior between the indicators and the price, meaning that when the price makes an equal or higher high than the previous high, the indicator makes a lower high than the previous high
    this will be a bearish divergence
    see the example
    -


    when the price makes an equal or lower low than the previous lowe, and the indicator makes a higher low than the previous low
    this will be a bullish divergence
    see the example
    -


    how to trade:

    entry point:
    if you are going to depend on the divergence only then I suggest waiting for the price to break below the low between the two tops ( if it is a bearish divergence)
    or above the high between the two bottoms ( if it is a bullish divergence)

    stop loss:

    above the highest high( if it is a bearish divergence)
    below the lowest low ( if it is a bullish divergence)
    target :
    The target should not in any way be less than then stop loss

    buy trade example



    sell trade example



    Useful Links
    chart-patterns-(head-and-shoulders)
    basic-trend-trading-for-beginners

  2. #2
    for 3 years I did forex trading, I can't understand divergence yet, even though I've learned it, but with this tread, I was able to understand it, thank you for giving a clear explanation about divergence, this explanation is very simple and easy to understand , so that I am a beginner trader, it's easy to understand, I will try this dvergence.

  3. #3
    Quote Originally Posted by maryrosi View Post
    for 3 years I did forex trading, I can't understand divergence yet, even though I've learned it, but with this tread, I was able to understand it, thank you for giving a clear explanation about divergence, this explanation is very simple and easy to understand , so that I am a beginner trader, it's easy to understand, I will try this dvergence.
    This is the simplest way to use the divergence (by the way there are other types of divergence I will discuss them later) and I'm pleased because you could understand it but you have to practice a lot until you get used to it and become a routine for you.

  4. #4
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    it is quite true that a lot of traders have been trading this market for so many years and still do not have the right knowledge about the divergence trading of the forex market. Divergence like you have explained here in word and in charts is that trading position where the price of the market could be making a new low while the indicator used such as the MACD can be making a new high. Most times, the direction of the market is always the opposite of the indicator.

  5. #5
    glory3, It seems to me that you also do not know anything about it you didn't even bother to copy what I said correctly, just have some dignity and stop spamming

  6. #6
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    Before you can make use of the divergence trading system, you must have studied the MACD indicator very well and make sure that you really understood it because this is where the real divergence trading system is taken from. Trading the divergence without first understanding the MACD, is like playing with fire in the market. Divergence is a trading system that is not too known to many traders and as a result of this, very few traders do know how to use nit to trade the market.

  7. #7
    Quote Originally Posted by tfs2012 View Post
    How do I use Divergence in my trades


    what is Divergence:

    It is a difference in behavior between the indicators and the price, meaning that when the price makes an equal or higher high than the previous high, the indicator makes a lower high than the previous high
    this will be a bearish divergence
    see the example
    -


    when the price makes an equal or lower low than the previous lowe, and the indicator makes a higher low than the previous low
    this will be a bullish divergence
    see the example
    -


    how to trade:

    entry point:
    if you are going to depend on the divergence only then I suggest waiting for the price to break below the low between the two tops ( if it is a bearish divergence)
    or above the high between the two bottoms ( if it is a bullish divergence)

    stop loss:

    above the highest high( if it is a bearish divergence)
    below the lowest low ( if it is a bullish divergence)
    target :
    The target should not in any way be less than then stop loss

    buy trade example



    sell trade example



    Useful Links
    chart-patterns-(head-and-shoulders)
    basic-trend-trading-for-beginners
    The buy and sell example that you have given did not do well, I think you should look for a better way to filter your entries, I trade with the use of divergence like you but I basically use the relative strength index as I have seen it to be the best, sometimes I get false signals which or perfectly normal, each system has its flaw, the macd is not my favourite at all.

  8. #8
    Quote Originally Posted by Leonvic View Post
    The buy and sell example that you have given did not do well, I think you should look for a better way to filter your entries, I trade with the use of divergence like you but I basically use the relative strength index as I have seen it to be the best, sometimes I get false signals which or perfectly normal, each system has its flaw, the macd is not my favourite at all.
    How do you say it did not do well Please explain to me how do you see the chart ??? the sell example did give more than 100 points and the buy example gave more than 80 points ??? If you can not see this I'm wondering if you're really using really using the divergence in your trades as you say ??

  9. #9
    Trader
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    Quote Originally Posted by tfs2012 View Post
    glory3, It seems to me that you also do not know anything about it you didn't even bother to copy what I said correctly, just have some dignity and stop spamming
    Your response was very amusing to me and i can to a moderate extent teach you a little about what divergence is and how to trade it even though i have never traded the divergence before. Let me start by telling you that even a kindergarten in the forex market knows more about what divergence is although many may not know the right way to trade it , so i do not see anything special about what you have posted here in your thread talking about divergence . I will be very dignify by not responding to your insult because i was not brought up to trade insults. If you claim to be a master of divergence trading , please kindly publish some of the trades you have done trading the divergence, and i will give it to you sir.No qualm bro.

  10. #10
    glory3, Are you crazy? Where did I claim to be a master of divergence trading?and if you do not see do not see anything special about what I have posted why did not you add new information ?? Since you know a lot about it, I'll tell you why because you are just a spammer this is your third comment and they are all worthless.

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