Community Forex Questions
What is regular divergence?
A regular divergence can help you detect a trend reversal. Short-selling or long-selling are excellent options at this time. The price chart would be ready to fall if the divergence is bearish. The time has come for forex traders to sell. As soon as there is a bullish divergence, it is time to get ready to buy since the chart will rise. By the way, Forex divergence examples may vary. It is important to use the oscillator to detect its type accurately.
Regular divergence is a technical analysis concept used to identify potential trend reversals in financial markets. It occurs when the price of an asset forms a new high or low, but the corresponding indicator (like the Relative Strength Index or MACD) fails to confirm it.
For bullish divergence, the price makes a lower low while the indicator forms a higher low, signalling potential upward momentum. In bearish divergence, the price reaches a higher high, but the indicator shows a lower high, indicating possible downward movement.
Regular divergence suggests weakening trend strength, offering traders a clue to anticipate reversals. However, it's essential to use it alongside other tools and risk management strategies, as divergence alone doesn't guarantee price movement.
For bullish divergence, the price makes a lower low while the indicator forms a higher low, signalling potential upward momentum. In bearish divergence, the price reaches a higher high, but the indicator shows a lower high, indicating possible downward movement.
Regular divergence suggests weakening trend strength, offering traders a clue to anticipate reversals. However, it's essential to use it alongside other tools and risk management strategies, as divergence alone doesn't guarantee price movement.
Jul 07, 2022 23:02