Is there a low-risk trading method that allows us to sell near the top of the trend and buy near the bottom of the trend?
If you already hold a long position in a currency pair, are you able to choose the perfect entry point and avoid the profit that could have been paid to buy Aston Martin’s down payment disappeared before your eyes, just because of the market Soon will be in the opposite direction of your judgment?
If you believe that a currency pair will continue to fall, can you have a way to go short at a better price or with less risk?
Guess what, there is indeed a way, which is to diverge from the transaction.
Simply put, by comparing price trends and indicator movement trends, we can determine whether divergences have occurred. It doesn’t matter what indicator you use, you can use RSI, MACD, stochastic indicators, CCI indicators, etc.
More importantly, you can use divergence as a leading indicator, and it is not difficult to draw after a period of practice.
By deviating from the trading method, you can achieve continuous profitability. The biggest advantage of divergence trading is that you can usually buy at the bottom of the trend or sell at the top of the trend. This makes your trading risk much lower than your potential return.
The exchange rate and the kinetic energy trend usually remain the same, just like Batman and Robin, sister Williams, salt and pepper always appear in pairs.
If the price high continues to rise, the shock indicator should also continue to rise; on the contrary, if the price low continues to fall, the shock indicator should continue to fall.
If there is a discrepancy between the price and volatility indicator trends, and the price and indicator trends diverge, then we are called a “divergence”.
Divergence is a very amazing trading tool, because the signal from the divergence indicates that the fish is about to be hooked, and you should be very vigilant.
Using divergence trading, you can very effectively portray a weakening trend or a situation where kinetic energy reverses. Usually, you can even use divergence tools as a signal that the trend will continue.