What is Stochastic Forex Divergence? - Forex Stochastic Divergence Meaning
Stochastic Forex Divergence Trading is one of the forex trading strategy used by online forex traders to analyze forex chart price movement. Stochastic Forex Divergence involves looking at a forex chart & one more forex technical indicator - Stochastic indicator. For our this forex trading divergence tutorials we shall use the Stochastic indicator - Stochastic Forex Divergence.
To spot this Stochastic forex divergence trading set up find two chart points at which forex price makes a new swing high or a new swing low but the Stochastic indicator does not do the same, thus indicating that there is a divergence between the price and momentum.
Stochastic Forex Trading Divergence Example:
In the forex chart below we spot two FX trading chart points, chart point A and chart point B (swing highs)
Then using Stochastic indicator we check the highs made by the Stochastic technical indicator, these are the highs which are directly below the Chart points marked A and B.
We then draw one line on the forex chart and another line on the Stochastic technical indicator.
Stochastic Forex Divergence Meaning - Bullish Divergence Stochastic - Bearish Divergence Stochastic - Stochastic Divergence Guide
How to trade Stochastic forex divergence trading setup
In order to trade Stochastic forex divergence trading setup we look for the following setups:
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
First let us look at examples of these forex divergence trading terms
What is Stochastic Forex Divergence? - Forex Stochastic Divergence Meaning - Forex Stochastic Divergence Cheat Sheet
Stochastic Forex Divergence Definition - Stochastic Divergence Forex Trading Cheat Sheet - Stochastic Forex Divergence Strategy Course - Stochastic Divergence Trading PDF
There are two types of forex Stochastic divergence setups:
- Stochastic Classic Divergence
- Stochastic Hidden Divergence
