FOREX THEORY
9 Rules for Trading Divergences
2. Draw lines on successive tops and bottoms
Okay now that you got some action (recent price action that
is), look at it. Remember, you’ll only see one of four things: a higher high, a
flat high, a lower low, or a flat low.
Now draw a line backward from that high or low to the
previous high or low. It HAS to be on successive major tops/bottom. If you see
any little bumps or dips between the two major highs/lows, do what you do when
your significant other shouts at you – ignore it.
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