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