FOREX THEORY
How To Trade Divergences
If you had answered yes to that
last question, then you would have found yourself in the middle of the
Caribbean, soaking up margaritas, as you would have been knee deep in your pip winnings!
It turns out that the divergence
between the stochastic and price action was a good signal to buy. Price broke
through the falling trend line and formed a new uptrend. If you had bought near
the bottom, you could have made more than a thousand pips, as the pair
continued to shoot even higher in the following months.
Now can you see why it rocks to get
in on the trend early?!
Before we move on, did you notice
the tweezer bottoms that formed on the second low?
Keep an eye out for other clues
that a reversal is in place. This will give you more confirmation that a trend
is coming to an end, giving you even more reason to believe in the power of
divergences!
0 comments