Forex Divergence traders observe Price action and an Oscillator Here’s how to spot and trade both types, Regular and Hidden divergence... This subject and many others are covered in more detail in the FREE Forex Guide available at Forex Useful - http://forexuseful.com/new/members/21812-forex-guide/

1. Forex Divergence
Forex Divergence traders observe
Price action and an Oscillator
Here’s how to spot and trade both types,
Regular and Hidden divergence...

2. There Are 2 Types Of Divergence
Classed as “leading” indicators there are two types of
divergence...
Regular & Hidden
Both types rely on price action and an oscillator (e.g.
MACD, Stochastic, RSI) to identify potential turning points
in the market
Usually when price makes a Higher High the oscillator will
also make a Higher High, etc.
Divergence occurs when things get out of sync...

3. Regular
Price makes a Lower Low,
Oscillator a Higher Low
Hidden
Price makes a Higher Low,
Oscillator a Lower Low
Bullish Divergence
These are setups for potential LONG trades

4. Regular
Price makes a Higher High,
Oscillator a Lower High
Hidden
Price makes a Lower High,
Oscillator a Higher High
Bearish Divergence
These are setups for potential SHORT trades

5. Produced by
Divergence helps identify potential opportunities
but should not be traded blindly
Common tools to assist trade entry are:
• Chart patterns
• Candlestick reversal patterns
• Overbought/Oversold oscillators
• Pivot points
Forex Divergence