New Forex Technique: Hidden Divergence


Divergence, which is a term that technicians
use when two or more averages or
indices fail to show confirming trends,
is one of the mainstays of technical
analysis. Heres a new way to use oscillators
and divergence as well as methods
to locate entry levels during a trend.
ost technical indicators
mirror or confirm price
movement. When price
moves up, the indicator moves up; when
price moves down, the indicator moves
down. When prices peak, the indicator
peaks; and when prices bottom, the indicator
bottoms. Sometimes, however, a
discrepancy occurs between price and
indicator movement. That discrepancy
is known as nonconfirmation and can be
seen most clearly on overbought or oversold
indicators as well as on indicators
that move above or below a zero line.
Many traders only learn to recognize
the type of nonconfirmation that occurs
at market tops and bottoms, which is the
classic divergence. But there are other
forms of nonconfirmation I call hidden
divergence (HD) that, when present,
offer additional profit potential
Tags: learn forex, learn stock market movements