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Hello community members, my this article is about Divergence Trading. which is a great tool when it comes to trading forex. we shall learn about the facts and ways to trade divergence. And how we can use it to be profitable in long run.
Sell High - Buy Low

What if there is way to sell near the top or buy near the bottom of a trend ? And if you are already in a long position and you could know ahead of time the perfect place to exit instead of watching your unrealized gains.
Well, There is a way! It’s called Divergence Trading !!
Divergence can be seen by comparing price action and the movement of an indicator. It does not really matter what indicator you use. You can use RSI ,MACD , CCI and the stochastic. The great thing about divergences is that you can use them as a leading indicator. When traded properly, you can be consistently profitable with divergences. The best thing about divergences is that you are usually buying near the bottom or selling near the top. This makes the risk on your trades are very small relative to your potential reward.
How to find out Trading Divergences : The price and the indicators normally move hand in hand. If price is making higher highs, the os…
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yellownight avatar

good luck

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Vlad73 avatar
Vlad73 30 Mar.

good article

CTygeHT avatar
CTygeHT 30 Mar.

Good article!

hrustiashka avatar

Хорошая статья. Спасибо!

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While surfing through various educational material on the internet, I noticed that many urges to avoid picking tops and bottoms as it seems to them to be a very risky thing to do. However, I often do quite the opposite and many experienced traders that I know of do the same. So what could possibly be wrong with the concept of “Buy low and sell high“? Probably the biggest problem is that you may not know how high or how low it still can go and because of that it is difficult to determine possible risk limitations.But here is the thing; those investors/participants, who entered at the very beginning of the move or at the break of the last support/resistance must take profits somewhere. These technical levels, where they are planning to take their profits, will be a turning point. If not for a reversal then at least for a relief movement (rally/retracement). That should be a significant enough move for a chance at a decent trade.So how does one determine where they plan to take their profits?First of all don’t forget that neither the top/bottom picker nor the one that is already in the trade is ever absolutely sure where the next possible turn is and as one of them is eager to enter, …
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scramble avatar
scramble 29 Jan.

interesting step about being both a bit in longer term perspective and scalping some pips to reduce risk!

SpecialFX avatar
SpecialFX 31 Jan.

Even though it's a well written article, I disagree more with the idea behind it. Trying to guess where trends end is usually a recipe for disaster in the long run, markets can remain "irrational" a lot longer than you can remain solvent. What is the point of trying to catch a falling knife for 25-50 pips only? Look at the yen pairs, they go up over 3000 pips, how many people have lost a ton of $$$ saying the pairs are overbought? The best example is your chart and where the price is now, way above 86...There's a reason for the trend being your friend, don't make it your enemy :)

doctortyby avatar
doctortyby 31 Jan.

Congratulation for another good article but the idea to fish the bottom and catch the top is the main danger for retail traders, both beginners and experienced ones. If I was a bank I would try to profit from it :)

Likerty avatar
Likerty 1 Feb.

SpecialFx - you missed the point. If entry was wrong at the peak - YOU KNOW THAT IMMEDIATELY - dount have to hold loosing trade for a hundred pips or so:) That example with yen shows how despite of the strong trend - price REACTS to the most key levels on its way, and that reaction often is good enough for decent counter trend trades. In this article Im talking about the MOST IMPORTANT tech levels that you can come up with in technical analysis.

Likerty avatar
Likerty 8 Feb.

Bu the way - USD/YEN droping from the levels (94.00's )based on this approach. Ive talked about this upcoming drop repeatedly in my recent webinars

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