Types of Forex Divergences - Types of Bearish Divergence - Types of Bullish Divergence
Types of Forex Divergence Definition - Divergence is a forex trading setup used by traders - Forex Divergence Trading Setups involves looking at a forex chart & a forex indicator - for example MACD indicator.
To find this Forex Divergence Trading Setups setup find two chart points which forex price makes a new swing high or a new swing low but the MACD indicator does not do the same, this trading signals a divergence between forex price & MACD technical indicator momentum.
For a Forex Divergence Trading Setups setup we look for 2 chart points, 2 highs that form an M shape on the Forex trading chart or two lows that form a WShape on trading chart. Then look for same M shape or W Shape on Forex MACD indicator.
Example of a Forex Trading Divergence Setup Trade Setup:
In the EURUSD forex chart below we identify 2 chart points, point A and point B (swing highs). These 2 chart points form an M shape on forex price chart.
Then using MACD indicator we check highs made by MACD indicator, these are highs that are direct below Chart points marked A & B.
We then draw one line on the Forex trading chart & another line on the MACD indicator.
Forex Divergence Trading Setups Signals - Types of Forex Divergence Meaning
The forex chart above shows an example of hidden bearish Forex Divergence setup.
hat is Forex Divergence Trading Setups Types of Forex Divergence
In order to trade Forex Divergence Trading Setups signal we look for the following:
- HH : Higher High - 2 highs but the last one is higher
- LH : Lower High - two highs but the last one is lower
- HL : Higher Low - 2 lows but the last one is higher
- LL : Lower Low - two lows but the last one is lower
Forex Divergence Trading Setups Terms Definition: Different Types of Forex Divergence Setups
M shapes on Forex charts dealing with price Highs
W Shapes on Forex Trading charts dealing with price lows
Example of M Shapes on Forex Charts - Bearish Divergence Trading - Bullish Divergence Trading
Examples of W Shapes on Forex Charts - Types of Bearish Divergence Setups - Types of Bullish Divergence Setups
Different Types of Forex Divergence Setups - Bearish Forex Divergence Setups - Bullish Forex Divergence Setups
