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Forex Tips and Strategy
Forex Bullish & Bearish Divergence Pattern
Divergence is a term which
often comes back in forex technical analysis, it occurs when the price
of the underlying currency pair and the indicator move in opposite
directions. A bullish divergence can predict future upturns, while a
bearish divergence can predict future downturns. Currency traders make
trading decisions by identifying situations of divergence, where the
price of a currency pair and indicators, such as the MACD, are moving
in opposite directions.
Bullish Divergence
Bullish
divergence occurs when the price of the underlying currency pair makes
a new low while the indicator fails to make a new low or heading higher
suggesting the downtrend may be nearly over. When identifying bullish
divergences, a currency trader will look for BUYING opportunities.
Bearish Divergence
Bearish
divergence occurs when the price of the underlying currency pair makes
a new high while the indicator fails to make a new high or heading
lower suggesting the up trend may be nearly over. When identifying
bearish divergences, a currency trader will look for SELLING
opportunities.
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| Category: Trading Strategy | Added by: forex-market (2009-09-29)
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| Views: 407
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