HFM information and reviews
HFM
96%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
FBS information and reviews
FBS
88%
Vantage information and reviews
Vantage
85%
MultiBank Group information and reviews
MultiBank Group
84%

Best Divergence Indicator in Forex Trading


Profit is what all traders aim at while working on the stock market. They use a variety of helpers to reach the goal. The most profitable trades are built on thorough analysis made by means of special programs.

Forex indicators are mathematical functions based on the evaluation of difference between bidding and price. While analyzing charts, a trader can predict whether a current trend will be the same or change somehow and thus create his own most profitable trading strategy.

What is divergence?

There are several types of instruments, though still no perfect ones. Many users tend to choose a divergence indicator because it leads to better results. It depicts the earlier sings of how forex will change in the future. At the moment of its turn, as a rule, the market reaches a peak and lets them know that there is no more power needed to keep on increasing. In other words, this phenomenon means that the direction of indicator’s movements is opposite to the direction of price’s line.

The most popular price divergence example is when the market shows a higher maximum, but an indicator does not depict it, on the other hand, calculating a lower maximum. It means that very soon the price may become lower. It is called bearish divergence signal.

The other example is when there are lower minimums on the market, though a chart shows a higher minimum. The phenomenon is known as bullish divergence.

Best Divergence Indicator in Forex Trading

The types of trading divergence

  1. Classical (takes place when a trend changes its direction);
  2. Hidden or reverse (a trend keeps on its movement, though changing a bit in this or that way);
  3. Expanding (a trader sees double peaks not analogous to the FX’s direction).

Experts of technical analysis create varied range of instruments to forecast changes. Moreover, they work with a couple best indicators for forex, giving no preference to a particular one. Different platforms have a variety of tools, the right usage of which will lead to good income.

The types of divergence indicators

There are many programs aiming at calculating divergence by means of technical analysis. Although specialists prefer to speak about 4 main types:

MACD (Moving Average Convergence/Divergence)

Moving Average Convergence/Divergence

RSI (Relative Strength Index):

RSI (Relative Strength Index)

CCI divergence indicator (Commodity Channel Index)

CCI divergence indicator (Commodity Channel Index)

Stochastic

Stochastic

Nevertheless, a trader may see functions among resources of a trading platform about which he could never thought to have such abilities, providing with an insight. But it should be noted, there is no best divergence indicator, each of them has its advantages and disadvantages. Every specialist chooses what’s better for his strategy.


RELATED

When can you trade forex?

The forex market is the world’s largest financial market. It operates around the clock, 5 days a week, providing abundant trading opportunities to traders globally...

How Much Money Can You Make Trading Forex? A Comprehensive Guide

Forex trading has witnessed a surge in popularity as individuals seek opportunities to profit from financial markets. However, it's paramount to approach forex trading with realistic expectations...

Guide to Expanding Your Forex Trading Account

The realm of forex trading is undeniably intricate. Yet, it is far from unattainable. It beckons to those equipped with determination and the right mindset...

Long Position Vs. Short Position: What's The Difference?

The tried and true formula for successful sales, "buy low, sell high," applies equally to financial markets. Traders use various types of transactions to achieve this, including short positions...

What is CFD Broker?

Let’s jump into what CFDs are, what a CFD broker is, and how to go about choosing one that bests suit your trading needs. Contracts for Differences (CFDs) are a type of derivative instrument...

How Panic Works In Stock Markets And How To Deal With It

We can recall dozens of examples of panics in the markets when in a few trading days with a loud chuckle whole states went into the mire of market volatility. In addition to recent events

How to forecast forex?

There are many articles telling about randomness and abruptness of forex. Some traders believe that it is impossible to predict anything in the market. Such authors try to persuade...

How to grow from newspaper seller to MT indicator creator

Are you trying to find motivation and change your life? It's a sign for you to start acting! If a boy from a large, almost penniless family managed to live a better life...

Understanding Lot Sizes: Balancing Risks and Rewards in Forex Trading

The trading arena operates in a complex ecosystem that is constantly balancing between potential gains and inherent risks. At the core of this delicate equilibrium is the crucial concept of lot sizes...

Top 5 most traded currency pairs

There are 180 currencies in circulation across the globe but not all are actively traded in the forex market. Only those currencies that have liquidity and show economic and political stability are traded...

The top 10 traits of a successful trader

So, you wanna be a trader huh? It’s no secret that online trading has become a lucrative avenue for individuals seeking financial independence in the digital age...

How Much Money Do You Need To Start Trading?

Understandably, novice traders ask numerous questions at the beginning of their careers, and this approach cannot be called wrong. First of all, newbies to the market are usually interested in how much money...

Overbought Vs Oversold: A Trader's Guide

Technical analysis of the forex market includes many different concepts and definitions, one of which is overbought and oversold. These terms have existed on the market...

Forex Currency Pairs Explained

The forex market may seem quite complicated to some newbies. Plenty of instruments, calculators, different programs, and strategies - all this can make an unprepared trader's head spin...

What is a Decentralized Autonomous Organization (DAO)?

Decentralized autonomous organizations (DAOs) are a relatively new and innovative concept in the world of blockchain and cryptocurrency. DAOs can be thought of as a form of decentralized organization...

Why Do Central Banks Have No Power Over Inflation?

Fighting global inflation, now at its highest point in decades, has become a number one priority for major central banks around the world. Monetary policy measures...

Why traders shouldn’t underestimate an Economic Calendar

Brace yourselves for the ultimate weapon in your trading arsenal - an Economic Calendar, revealing the future of financial markets. So, why should you care?

Mastering Risk Management: Techniques for CFD Trading

Read this article to discover practical risk management techniques for successful CFD trading. Learn about setting stop-loss orders, position sizing, risk-reward ratios, and more...

Exploring the Depths of Price Levels and Market Impact in the Brokerage Industry

In this comprehensive analysis, we delve deeper into the intricacies of pricing within the brokerage industry, extending the foundational knowledge established...

Conquering the Clamor: Navigating Market Noise for Informed Decisions

In the whirlwind world of finance, market noise is a constant presence, creating a din that can easily muddle the decision-making process for traders and investors...

XM information and reviews
XM
82%
FP Markets information and reviews
FP Markets
81%
FXTM information and reviews
FXTM
80%
AMarkets information and reviews
AMarkets
79%
Octa information and reviews
Octa
79%
BlackBull information and reviews
BlackBull
78%

© 2006-2024 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.