Technical Trading Tips and Techniques by 
On the subject of price-oscillator divergence that I briefly touched upon in yesterday’s Forex Swing Trading webinar here on FXstreet.com, I wanted to give a real-life example of where divergence works, and where it might not work so well. Then I remembered that I wrote an article last year all about divergence. One must be cautious when a bonafide divergence signal appears. Especially on longer-term charts, these signals can certainly be reliable. But they should only be considered as hints or confirmations of impending turns, and not as all-encompassing, self-sufficient trading signals. With that said, please click on the link below to read my article on divergence. Although the charts on this article are a year old, it shows some interesting things about price-oscillator divergence. Here is the link: Click Here
- James
James Chen is the Chief Technical Analyst at FX Solutions, a leading Forex broker. He is also a registered Commodity Trading Advisor (CTA) and a Chartered Market Technician (CMT) Level 3 candidate. At FX Solutions, Mr. Chen writes daily currency analysis, conducts forex trading seminars, and has authored numerous articles on currency trading and technical analysis for major financial publications. His upcoming book, Essentials of Foreign Exchange Trading
A divergence in the MACD indicator has been found. When this appears on a 5th wave this could be a sign of exhaustion. The current upward trend may soon correct or end. The CCI has crossed below 100. Look for falling prices soon.
Thank you for a good Post.
Hi Forex Genie,
Thanks for your comments and analysis!
- James