Forex Trading Strategies Divergence Trading Strategies 4 - How to Use Divergence Trading in the Forex Market
Now its time to apply forexrebatebest to our trading to achieve our ultimate goal of profitability We will show you some examples of divergence between price autorebateforex stochastic indicators indicators First, lets look at the regular divergence The chart below forex broker rebate program the USD/CHF daily chart From the down cashback forex line we can see forexbrokerrebateprogram the USD/CHF has been in a However, there are already signs that the downtrend will end soon, even though the exchange rate has made new lows, the stochastics (our chosen indicator) is showing higher lows. Haha, the big fish is about to take the bait is the downtrend coming to an end and should we buy now? If your answer is yes, then congratulations, this time the fish you caught is indeed a big fish The results show that the divergence of stochastics and price action sends a good buy signal (Forex Academy www.waihuibang.com/fxschool/) Price breaks through the downtrend line suppression and forms a new uptrend If you buy at If you bought near the bottom, your profit could have been over 1,000 pips as the USD/CHF exchange rate continues to move higher in the coming months Now, do you see why we should enter early in the trend formation? Before we enter, did you notice that a tweezer bottom line was formed at the level of the second low? This will give you more information that the trend is ending and give you more reason to believe that the divergence is really powerful. Next, lets look at an example of a hidden divergence. Notice how the exchange rate is forming a lower high, but the stochastics are continuing to make new highs. Will the exchange rate continue its previous downtrend? Of course, if you are not so sure how else to operate, you can start by observing the trend line If you plan to stand by and watch, the top of your head may be the same as Georgian, because you have freaked out to the point of pulling all your hair out Why? The trend is continuing! USD/CHF is under pressure from the trend line and then dips again, eventually dropping almost 2,000 pips! Imagine what it would be like if you had drawn this hidden divergence pattern and decided that the trend would continue? Wouldnt you be smiling from ear to ear even in your dreams?