FOREX THEORY
Regular Divergence
As you can see from the images
above, the regular divergence is best used when trying to pick tops and
bottoms. You are looking for an area where price will stop and reverse.
The oscillators signal to us that
momentum is starting to shift and even though price has made a higher high (or
lower low), chances are that it won’t be sustained.
See the regular bearish divergence
at work through this GBP/USD trade handpicked by Pipcrawler!
Did you get all of that? Pretty
simple eh?
Now that you’ve got a hold on
regular divergence, it’s time to move and learn about the second type of
divergence – hidden divergence.
Don’t worry, it’s not super
concealed like the Chamber of Secrets and it’s not that tough to spot. The
reason it’s called “hidden” is because it’s hiding inside the current trend.
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