Divergence, examples of which are quite common to see on the chart in the terminal of the currency market is a clear discrepancy between the value of trading instruments and performance indicators.In other words we can say that the signal on the indicator should be the opposite of that usually appears when the price reaches a new maximum, and minimum.Together with strong levels of support and resistance lines, trend lines, and other signals, the pattern can give a good profit.It can be called an integral part of an effective trading.All indicators of divergence "Forex", especially oscillators, helping to clearly identify the discrepancy, as they are ahead of price movement.The signal is often used by professional traders and beginners.It allows you to carry out an overall analysis of the market "Forex" and warn of impending trend reversal.
Types divergences
Among the patterns of the market "Forex" that appear on the charts more than any others, is the divergence.Examples of signals can be varied, stimulating the emergence of several types of "non-compliance".The most common is considered a classic divergence.The model indicates a sharp reversal of the trend.
She warns the trader to reduce the momentum and the high probability of forming a new peak.For the classical (simple model) divergence characterized following features:
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lows on the price chart coincide with the high peaks of indicators, oscillators, signaling a trend reversal upwards.This is a clear pattern of "bullish" divergence.
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highs on the price chart coincide with lower highs indicators, oscillators, signaling a trend reversal downwards.This is a clear scheme of "bearish" divergence.
Divergence Class A
studying a trading signal, the divergence, it is recommended to study the examples carefully.This will clearly identify two subtypes signal.Let's start with the divergence of class A. This is one of the most powerful trading signals, which indicates a significant reversal of the main trend.At the "bullish" signal price Currency draws a new high, the light forms a new low.The secret lies in the fact that higher minimum does not have strong momentum to continue the movement.At the "bearish" signal price makes a new high and the indicator takes the opposite signal.To continue the momentum of movement is not enough.
Divergence Class B
Divergence Class B - is a weak signal type.It may be indicative of a gradual change of the price movement.This signal requires confirmation.Opening of the transaction must be supported by the auxiliary patterns.For the "bullish" divergence characterized by the formation of figures "double bottom", and the indicator - the formation of a high minimum.
double bottom is an area of unstable equilibrium where there is the probability of continuation of the trend, and its reversal.For the "bearish" divergence characteristic of the formation of a double top on the chart on the oscillator and the fixing of a new lower high.Thus it is necessary to consider the likelihood that prices still have the momentum to continue for the short-term movement.
Hidden divergence
often formed on the chart hidden divergence.Examples of its formation can be seen quite often.In contrast to the correct pattern, the signal indicates the continuation of a trend."Bull" hidden divergence is visible by fixing the price of new lows on the chart, and the formation of new bottom on the display."Bear" hidden divergence is different forming lower highs on the chart and the formation of the high peaks on the display.The signals are used effectively to trade with the trend, as they allow you to determine the optimal entry point into the market.
Trade: basic settings
Divergence "Forex" can be identified using the built-in terminal MACD indicator.For shopping tools you need to install the following options:
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period of rapid - 12;
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exponential moving average - 26;
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simple moving average - 9.
All parameters are applied to the closing level.For trade can be used any currency pair and any time frame.Entrance to the need to implement a long position when the price is in the "bearish" trend and the MACD indicates a "bullish" trend.To enter into a short position should be the reverse signal."Stop" is set around the nearest support level when trading long positions, and the next resistance level, if the trade is conducted on the short position."Profit" is set to the next level of resistance at the opening of long positions and the next level of support at the opening short positions.
Specificity trade
considering this pattern, the divergence, the examples it can be seen perfectly on all currency pairs, and at all time periods.Experienced traders attributed the phenomenon in the market with the need for brokers to dump losing positions.The average frequency of the signal is 3-4 times a month for each of the currency pairs.It is because the profitability of this tool depends exclusively on the number of currency pairs, which are used in trade.Signals check the number of points between the vertices in the graph, as a minimum and maximums.The run must be from 25 to 50 points, depending on the couples.The larger the run between the vertices at the points considered the stronger signal.
What is the most effective indicator of divergence?
In classical economics to find divergences customary to use the MACD indicator, which was written above.The techniques involve the use of the search pattern, the stochastic indicator and Osman.Experienced traders adapt to find almost any divergence from the built-in indicators, oscillators.Divergence indicator can be set separately.It will signal the emergence of the desired patterns on the chart, which will reduce the work of the trader.
Everyone has the right to choose the trading instrument, which he will be most convenient to visually perceive.Noticing the formation of the pattern, you need streak lines and connect the top of the highs and lows and the indicator, and on the chart.This will determine the successful entry point into the market.The graph divergence does not always look like the picture with examples.Figures may be inconspicuous and distorted.Only a long experience in the mining process and tracking the figures over time will allow to easily identify it on the charts.Experts recommend that before you start trading at a given signal, explore its history.This allows to adapt the visual perception of the market.
notes or Novice
Trade of divergence can be used in all time periods, but it is worth remembering that the greater the time frame, the longer the price will go to the purpose.The reversal of the trend could be delayed for a long enough period of time.On the lower timeframes should exercise caution when using this tool.It often happens that at the time of fixing the model of price reversal has occurred.To minimize the risks it is recommended to compare the divergence at different time intervals.This technique allows you to come to the fact that the divergence of the "Forex" brings the greatest possible profit.
pattern is one of the few effective signals to rationally use when trading against the trend.The signal is much stronger than all other indicators indicators as purchased and integrated into the terminal.The signal is amplified on longer time periods.Effectively linking indications of divergence from the trend line breakdowns.
divergence in the sciences
not only in the market "Forex" can meet the phenomenon of divergence.The evolution has led to the fact that the concept is one of the fundamental physics.This basic concept of the theory, the foundation of nearly all of the physical language.In accordance with the classical science, the central place it occupies as the divergence.Paul is considered to be not only the dominant instrument in the calculations, but important idea.She plays the role of statistical backbone.The divergence of the rotor field, the flow of substances widely applicable in the majority of exact sciences.
In electrodynamics, the divergence of the rotor is used as a basic construct in two of the four equations of Maxwell.The main equation of Newton's theory of gravity with respect to the format field contains divergence.It also occurs in the tensor theories, including general relativity.In turn, the general theory of relativity is part of a large number of modern theories.Parameter widely used in the geometrical aspect.By the material flow to the rate of flow of gases and liquids to the density of electric current applied divergence.The concept is very versatile and has managed to find its place even in the international currency market.
