How to Best Use Divergence in the Forex Market

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#475: How to Best Use Divergence in the Forex Market

In this video:
00:26 – Using Divergence
01:27 – The 2 types of Divergence
02:22 – Reversals and Continuation Patterns
03:49 – Continuation Patterns are Higher Probability Trades
04:59 – Regular and Hidden Divergence
05:32 – Blueberry Markets for MT4 and MT5

Does divergence really work in the Forex market? And if so, how can you best use it? Let’s talk about that a more right now.

Hey, there Forex traders, this is Andrew Mitchem here, the owner of the Forex Trading Coach with video and podcast number 475.

Using Divergence

I want to give you a really good bit of trading information here regarding the use of divergence. And you’d know that if you’ve been following me for any length of time, I use predominantly candle patterns. I look at price action, I look at support and resistance levels and strength and weakness on the charts, as that to me is the most important information. However, there is one indicator that I use of the more traditional lagging indicators, and that is the stochastic indicator. And I use that in a few ways. It helps me to determine if the price is overboard or oversold.

And what that means is if the price is going up and up and up and it’s then overbought. If I were to see a reversal pattern, that means that it’s in quite a high probability part of the chart, that the price cannot keep going up forever and therefore it’s lightly to then pull back. And I can take a potential cell position, but I also use the stochastics to help me with divergenc