Forex indicators are mathematical functions based on the evaluation of the difference between bidding and price. While analyzing charts, a trader can predict whether a current trend will be the same or change somehow and thus create his own most profitable trading strategy. By using divergence indicators, traders may effectively reveal higher and lower momentum, and therefore the possible trend continuation or reversal. Effectively using the forex divergence trading system may be one of the best tools to forecast the situation and to achieve the best trading results.
CONTENTS
1. What is divergence
2.Types of divergence
3. Indicators to use for Divergence Trading
4. Rules for Determining Divergence
5.Divergence Trading – Some important points
6.conclusion
1.WHAT IS DIVERGENCE
It is an age-old concept that was developed by Charles Dow and mentioned in his Dow Tenets. The most important of all is when Dow found out that when there was a divergence between the two, it presented a possible change in the markets. For example, when the Dow Industrials made new highs and when the transportation index failed to make a high it indicated that there was some discrepancy. This formed the basis …
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