{"id":9711,"date":"2022-10-12T20:10:34","date_gmt":"2022-10-12T20:10:34","guid":{"rendered":"https:\/\/mdr.foobrdigital.com\/?p=9711"},"modified":"2022-10-12T20:10:34","modified_gmt":"2022-10-12T20:10:34","slug":"divergences-are-not-a-trade-signal","status":"publish","type":"post","link":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/2022\/10\/12\/divergences-are-not-a-trade-signal\/","title":{"rendered":"Divergences are NOT a Trade Signal"},"content":{"rendered":"\n<p>Please keep in mind that&nbsp;<strong>we use divergence as an INDICATOR, not as a signal to enter a trade<\/strong>!<\/p>\n\n\n\n<p>It wouldn\u2019t be smart to trade based SOLEY on divergences since too many false signals are given.<\/p>\n\n\n\n<p>It\u2019s not 100% foolproof, but when used as a&nbsp;<em>setup condition<\/em>&nbsp;and combined with&nbsp;<strong>additional confirmation tools<\/strong>, your trades have a high probability of winning with relatively low risk.<\/p>\n\n\n\n<p>There are a bunch of ways to take advantage of those divergences.<\/p>\n\n\n\n<p>One way is to look at\u00a0trend lines\u00a0or\u00a0candlestick patterns\u00a0to confirm whether a\u00a0reversal\u00a0or continuation is in order.<\/p>\n\n\n\n<p>Another way is to make use of momentum tricks by watching out for an actual crossover or waiting for the\u00a0oscillator\u00a0to move out of the overbought\/oversold region.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/bpcdn.co\/images\/2016\/05\/grade11-divergence-overbought.png\" alt=\"Divergence Tip: Wait for oscillator to move out of overbought or oversold conditions.\"\/><\/figure>\n\n\n\n<p>You can also try drawing&nbsp;<strong>trend lines<\/strong>&nbsp;on the oscillator too.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/bpcdn.co\/images\/2016\/05\/grade11-divergence-trendline.png\" alt=\"Divergence Tip: Draw trend lines on the indicator itself.\"\/><\/figure>\n\n\n\n<p>With these nifty tricks, you can guard yourself against false signals and filter out those that\u2019ll be very profitable.<\/p>\n\n\n\n<p>On the flip side, it is just as dangerous trade against this indicator.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/bpcdn.co\/images\/2010\/12\/24205116\/lost-360x360.png\" alt=\"Divergence Forex Trading\" class=\"wp-image-178008\"\/><\/figure>\n\n\n\n<p>If you\u2019re unsure about which direction to trade, chill out on the sidelines.<\/p>\n\n\n\n<p>Remember that\u00a0<strong>taking no position is a trading decision in itself<\/strong>\u00a0and it\u2019s better to hold on to your hard-earned cash than bleed\u00a0Benjamins\u00a0on a shaky trade idea.<\/p>\n\n\n\n<p>Divergences don\u2019t appear that often, but when they do appear, it\u2019d behoove you to pay attention.<\/p>\n\n\n\n<p>Regular divergences\u00a0can help you collect a big chunk of profit because you\u2019re able to get in right when the trend changes.<\/p>\n\n\n\n<p>Hidden divergences\u00a0can help you ride a trade longer resulting in bigger-than-expected profits by keeping you on the correct side of a trend.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/bpcdn.co\/images\/2010\/12\/24191351\/divergence-360x360.png\" alt=\"Divergence\" class=\"wp-image-177954\"\/><\/figure>\n\n\n\n<p>The trick is to train your eye to spot divergences when they appear AND choose the proper divergences to trade.<\/p>\n\n\n\n<p>Just because you see a divergence, it doesn\u2019t necessarily mean you should automatically jump in with a position.<\/p>\n\n\n\n<p>Cherry-pick your setups and you\u2019ll increase your odds of winning trades.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Please keep in mind that&nbsp;we use divergence as an INDICATOR, not as a signal to enter a trade! It wouldn\u2019t be smart to trade based SOLEY on divergences since too many false signals are given. It\u2019s not 100% foolproof, but when used as a&nbsp;setup condition&nbsp;and combined with&nbsp;additional confirmation tools, your trades have a high probability [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[781],"tags":[],"_links":{"self":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts\/9711"}],"collection":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/comments?post=9711"}],"version-history":[{"count":0,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts\/9711\/revisions"}],"wp:attachment":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/media?parent=9711"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/categories?post=9711"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/tags?post=9711"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}