A Divergence is basically the currency
is going up but the stockastic is going down and vice versa. The
price will eventually go in the direction of the stockhastic.
• Use Parabolic sar for timing entry
and exit.
• Works with all time frame
• Stochastic should preferably be
either at support or resistence
Divergence is basically price action
measured in relationship to an oscillator indicator. It doesn't
really matter what type of oscillator you use. You can use RSI,
Stochastic, MACD, etc. The great thing about divergences is that you
can use them as a leading indicator.
• Since you are buying near the top
or selling at the top, your trade risk is less.
• Divergence act as an early sign to
tell you that the market could reverse.
• Divergences act as only an
indicator not for entry or exit.It is not 100% foolproof!
• Use other indicators to confirm
your findings.
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