What is divergence in forex

Divergence is a powerful signal in technical analysis that points out positive or negative price moves ahead.However, we sometimes come across some scenarios where it's not the case.Divergenceis a concept in technical analysisthat describes when an asset's price is moving in the opposite direction of another piece of data, usually a technical indicator.( full story) comments subscribe post 1 quoteThe presence of divergence on the chart shows a possible rate reversal.In the 1hr chart below, gbp/usd is building a bearish channel (black line).

Most of the time, if the price is reaching higher highs, the oscillator should follow it by also making higher highs.Divergence in forex is when the price of a currency pair moves in one direction and a technical indicator, usually an oscillator, moves in the opposite direction.When trading currencies, forex divergence is typically seen as a sign that the current price direction is weakening and losing momentum, resulting in a possible change of direction.It is generally assumed that currency prices and forex indicators will move in the.Divergence in the forex market is one of the key indicators in the technical analysis of currency trends, which shows the discrepancy between the direction of the price chart and the selected technical indicator.The best indicator for divergence patterns is the awesome oscillator (chris's favorite), but there are also others like macd.pro (nenad's favorite), the rsi, cci, or stochastic.

Rsi = σ white candles / σ black candles x 100%.What is a divergence in trading forex divergence is defined as a case when the price of an asset is moving in the opposite direction of a technical indicator, such as an oscillator.Divergence forex trading strategies are frequently applied by currency traders around the globe.If price reaches a lower high then the indicator is supposed to follow suit.