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Forex Divergence Strategy Tutorial
for extra virgin strategy everybody this is Jordan with Jesse else forex forex trading live YouTube channel and in this video I'm going to teach you all about forex divergence a Forex divergence strategy and all the rules you need to follow to use forex divergent as a leading indicator in your trading alright let's get started for extra virgin's explained forex divergence may be easy to understand but don't let that fool you its power divergence is extremely helpful acting as a leading indicator giving you an early warning signal that a trend is about to end or new one to begin divergence is an indicator to look for and exit to an existing position and order to look for an entry into a new position this is divergence trading divergence is the difference between what you see price doing on a chart and an indicator normally an oscillating RSI MACD CCI stochastic what they're doing on the chart if prices continue to make new highs and the divergence indicators making new lows you have divergence hidden divergence first regular divergence alright there are two types of divergences regular and hidden alright there are also two types of divergences for both hidden divergence and regular divergence which are bullish and bearish regular divergence includes bullish divergence and bearish divergence and hitting divergence also includes both bullish divergence and bearish divergence now let's spend some time looking at the charts first we're going to take a look together at all four of these types of divergence regular divergence both bullish and bearish and then we're going to look at hidden divergence both bullish and bearish I want you to be able to recognize all four of these so that we can then look at real-time charts and look for them occurring and that way you'll be able to spot them and utilize them in your trading now first regular divert divergence is used again it's an early warning sign it's a possible sign of a trend reversal so let's say for example we're looking here at bullish regular divergence and let's say that I am in a short position price is going down in the direction of my trade and then I see that price is making a lower low while my osku later is making a higher low ok this is regular divergence bullish divergence and what that means to me is that I want to be looking to exit my short positions here as well as possibly look for a trend reversal and maybe start scaling into a long position so again regular bullish divergence is when price is making a lower low while the óscar me escalator is making a higher low now let's take a look at regular bearish divergence and again this is a sign of a possible trend reversal if I'm in a long position how do I know when to exit one of the clues one of the signs would it be if I saw price making a high high but the oscillating couldn't do it and it made a lower high ok right there I would have regular bearish divergence occurring and I would be looking for price to take me out of my position to exit my position and possibly look at this point to establish some short position on a trend reversal next let's look at hitting divergence ok now hidden divergence could be a sign of a potential trend reversal also or of a trend continuation so you want to be on the side you most likely over the trend and let's say that you see a new trend establishing itself and you're looking to find a place to get into this move ok now hitting divergence would be an opportunity to do that now let's take a look first we're gonna look at hidden bullish divergence and this happens when price makes a higher low while the Oscar Oscar later makes a lower low so picture you an uptrend just started and then this is the pullback right here the pullback in this new uptrend and then how do you know when to enter out of the pullback so the pullback gonna continue or is price gonna reverse back towards the trend now if I see price make a higher low right why my Oscar later makes a lower low I then want to look for our long entry to get me back into that trade or as well as if this wasn't enough trend right if I'm in a short position in a short trend and I see hitting divergence occur with the price making the higher low and the obstacle later making the low or low that is a sign for me to look to exit this trade now let's look at hidden divergence bearish hidden divergence okay bearish hidden divergence occurs when price makes a lower low a lower high excuse me and the oscillator is making a higher high okay and this is again if I'm in a long position and I see a bearish hidden divergence occur I'm gonna be looking to exit my position as well as if I'm looking to establish a short position if I see a new this is a continuation pattern so if I see that prices started a downtrend and I'm looking for a good opportunity to get into this new downtrend what I'm going to look for is I'm going to look at that hidden bearish divergence to occur and once it does that would be a good spot for me to look to get back into the trade with the trend now let's take a look at some examples of divergence occurring on some live charts let's take a look at divergence occurring in real time and we life and this is a live chart of the euro US dollar and well look here we have looks possibly to be an exhaustion move but where would I know to take profits let's see let's jump down to the 5-minute chart and I'm gonna insert into the chart an oscillating with the stochastic hey let's see if we're trading price here in real time we saw be here that we have regular bearish divergence we see that we have the oscillator making a series of lower lows and price making higher highs right and what that means to us that the early morning signal that this trend here is coming to an exhaustion right and we look at take profits on that possibly if we wanted to take a kind of tripped rate and too short now you most of you know that I'm a fan of the two trend and let's see that occurring as well okay here we are here is that up move in price price making a series of higher highs and then we have the true trend making the lower lows divergence on the true trend as well now for those of you who would like to implement Forex divergence strategy into their trading I think all traders absolutely all traders should be aware of it when it's occurring it's a great exit signal as well as a heads up to if you see a trend a new trend beginning a trend continuing to use your other tools other price action tools that we patterns that we use to enter and exit trades now I discover something a resource that I want to share with you right now now for those of you who are looking to take Forex divergence trading stuck further than looking to trade Forex divergence strategy I'm gonna recommend this resource here by book by Jim Brown trading Forex with divergence on metatrader4 Jim is constantly a best-seller author on Amazon with five-star reviews on all three of his books so this is something died if you want to look into trading divergence not only as a tool in your trading but it's a full-time strategy this is something that you would want to look into now this is my first time using this type of format on this forex trading live channel if you have any feedback and comments but you can add them below and I would be grateful for that now let's review one more time you