Marenno
Short

HOW TO TRADE DIVERGENCES

FX:EURUSD   Euro / U.S. Dollar
I will discuss one of the methods of trading a divergence.

The main advantage of the divergence trading is that you are able to enter the market right at the beginning of the swing.

The rules to follow:

1. Spot a difference in a direction of momentum and price
2. Wait for a reversal pattern to complete
3. Enter the market in the direction of the momentum
4. It is not recommended to enter against the main trend (not the same as a price direction) direction.
5. Always have a predetermined short target.
6. If the trade is based only on a divergence, then use a 1st target, otherwise use a partial position close

P.S. Divergence trading is a 100% technical, so it's signals are not reliable in a long term, but very useful in a short term swing trading.


Your likes is the best motivation for me to keep up :)

Any questions are welcome!
Comment: it's funny how the market is changing, even while I was writing this post, that's why I think that confirmation by the price pattern formation is important.
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