How I Trend Trade with Ichimoku (finding divergence)..

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U.S. Dollar/Japanese Yen (FX:USDJPY)

FX:USDJPY U.S. Dollar/Japanese Yen

educational

This is a great tool that I have never seen anyone talk about. Well, I'm talking about it

What is the significance of the divergence? In other words, what does it tell us exactly? A higher divergence higher upcoming momentum?

fatkumo

I just answered that above.
As for highr TF divegence... it implies a deeper retracement on your current TF

Thanks for this and all your varied material which I've been working through. They are probably a bit basic but I have two questions on this:

1) when you say that the price went lower with the second example despite the smaller gap between the TS and KS do you mean the depth of price continuing to the downside after the retracement in each case? i.e. the longer two large red candles in the second one?
2) Having spotted such divergences, could you explain how they can then be used / what is the interpretation? In this instance, for example, does it make the whole picture look more bearish?

Many thanks

MC2016

1. I mean that price in the second bubble is lower than the first
2. Divergence that we talk about is between price movement and price acceleration. The assumption is that for price to reverse, it must:
a. decelerate
b. stop
c. reverse
So divergence is telling us that it is decelerating. So it is like an early warning sign.
Off course it could decelerate and then accelerate again so not every divergence will go trough a,b and c

even looking at Structure with Support and Resistance .....thanks this is very motivating

KassimLa

Thanks

I am a little lost in this concept.

Could you better explain the divergence in the area you marked?

thanks

ericholzer

I'll try to do that with live examples
Follow my trades

Good luck

Ichimoku_Trader

maybe I get it

the more distance between TS and KS mean greater divergence

ericholzer

yes less is less and more is more

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