Preschool>= Lesson Status ?
Kindergarten>= Lesson Status ?
Elementary>= Lesson Status ?
Grade 1 Support and Resistance Levels
Grade 2 Japanese Candlesticks
Grade 3 Fibonacci
Grade 4 Moving Averages
Grade 5 Common Chart Indicators
Middle School>= Lesson Status ?
Grade 7 Important Chart Patterns
Grade 8 Pivot Points
Summer School>= Lesson Status ?
High School>= Lesson Status ?
Grade 9 Trading Divergences
Grade 10 Market Environment
Grade 11 Trading Breakouts and Fakeouts
Grade 12 Fundamental Analysis
Grade 13 Currency Crosses
- What is a Currency Cross Pair?
- Crosses Present More Trading Opportunities
- Cleaner Trends and Ranges
- Taking Advantage of Interest Rate Differential
- Obscure Crosses
- Planning Around News and Fundamentals
- Creating Synthetic Pairs
- Euro and Yen Crosses
- How to Use Crosses to Trade the Majors
- How Cross Currency Pairs Affect Dollar Pairs
- Summary: Currency Crosses
Grade 14 Multiple Time Frame Analysis
Undergraduate>= Lesson Status ?
- Why Keep a Trade Journal?
- Benefits of Keeping a Journal
- What Should You Record in Your Journal?
- Potential Trading Area
- Entry Trigger
- Position Sizing
- Trade Management Rules
- Trade Retrospective
- Trading Journal Statistics
- Reviewing Your Trading Journal
- Difficulties of Keeping a Trade Journal
- Summary: Keeping a Trade Journal
Graduation>= Lesson Status ?
- Which Trading Style is Best for You?
- Which Currencies Should You Trade?
- What is Your Level of Trading Experience?
- Should You Be a Discretionary, Mechanical, or Hybrid Trader?
- What Kind of Mechanical System Suits Your Personality?
- What is Your Attitude Towards Risk?
- What Kind of Stop Suits Your Trading Style?
Please keep in mind that we use divergence as an indicator, not a signal to enter a trade!
It wouldn't be smart to trade basely solely on divergences since too many false signals are given. It's not 100% foolproof, but when used as a setup condition and combined with additional confirmation tools, your trades have a high probability of winning with relatively low risk.
There are a bunch of ways to take advantage of those divergences.
Another way is to make use of momentum tricks by watching out for an actual crossover or waiting for the oscillator to move out of the overbought/oversold region. You can also try drawing trend lines on the oscillator too.
With these nifty tricks, you can guard yourself against false signals and filter out those that'll be very profitable.
On the flip side, it is just as dangerous trade against this indicator.
If you're unsure about which direction to trade, chill out on the sidelines.
Remember that taking no position is a trading decision in itself and it's better to hold on to your hard-earned cash than bleed Benjamins on a shaky trade idea.
Divergences don't appear that often, but when they do appear, it'd behoove you to pay attention.
Regular divergences can help you collect a big chunk of profit because you're able to get in right when the trend changes.
Hidden divergences can help you ride a trade longer resulting in bigger-than-expected profits by keeping you on the correct side of a trend.
The trick is to train your eye to spot divergences when they appear AND choose the proper divergences to trade.
Just because you see a divergence, it doesn't necessarily mean you should automatically jump in with a position. Cherry pick your setups and you'll do well.
For more discussions on divergences, visit any of the following forum threads:
Questions on Stochastic Oscillator / Divergence
Divergence Trading: Avoiding False Signals
Hidden Divergence and Divergence
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- Divergence Trading
- Regular Divergence
- Hidden Divergence
- How To Trade Divergences
- Momentum Tricks
- 9 Rules for Trading Divergences
- Divergence Cheat Sheet
- Summary: Divergences