Forex Trading With Divergence Strategy
There is no strategy that can provide a BUY (LONG) or SELL (SHORT) signal with the right position meaning that it is able to maximize profit. So we can open BUY position when the price has just risen from the bottom (bottom) and SELL when the price has just dropped from its peak (top). Then when we are in a BUY position we know that the price will end the trip and or when you are sure that the price will continue to decline and you can open a position with the right entry so as to generate maximum profit.
Hmmm it turns out that the strategy is, bro 🙂 the indicator is called a DIVERGENCE STRATEGY.
Divergence can be interpreted literally as difference. So this strategy uses different directions from price trends with an indicator (eg RSI, MACD, Stochastic etc.). By using this strategy we can easily see when prices have weakened so that in the near future there will be a reverse movement and also be able to see that prices will continue to move strongly because there is still a lot of driving energy. There are two types of divergence, namely HIDDEN DIVERGENCE and REGULAR DIVERGENCE .
This is a glimpse of the meaning of divergence in price movements of currency pairs. If the price is able to form Higher High , the indicator (oscillator) also indicates Higher High and when the price is able to form Lower Low the indicator (oscillator) also indicates Lower Low . But if prices and indicators (oscillators) show different things, this is what is called divergence.
How about it still confused about this Divergence explanation! if YES, please just follow the next explanation about how to trade forex with a divergence strategy 🙂