Trading divergence is just a great way to spot trends and their reversals as you go by your oscillators and comparing them to your graph.
The real art of trading divergence is to spot it on time. For that we need to look for the different performance in the graph and in the oscillators.
Let’s look at the picture here. We see that the graph is hitting lower lows, but the oscillator is hitting higher low. And right after the lowest point in the graph we can expect a price to shoot up. That means that it is a perfect time to BUY and get profit off those pips you are bound to have.
And it just the same with the hidden divergence.
Only there the trend is going to reverse after the graph is showing higher lows and oscillator is pointing higher highs and we need to SELL ASAP! Just we see in the picture on the right.
These are just a couple of examples how you can catch your precious pips while trading divergence. My recommendation is this: print out the description of your divergence.
Look at all of the information we have already learned. And we not eve near the end at this point. There is a whole lot of information for us to go through. That is why everything that might seem necessary for you, you need to print out or write it down into your trading journal. Until you are a pro you are going to forget things. I am saying that because I am the same.
Too much information is going to overload you brain at some point, so do not be afraid and do not hesitate to put things you need right in front of your eyes. But that is just my humble advice.
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