FX Path

Technical Trading Tips and Techniques by James Chen, Chief Technical Strategist at FX Solutions.

Or subscribe via email:

Next webinar

Drilling down, Support and Resistance
by Triffany Hammond
February 09, 17:00 GMT
Register for the webinar

FXstreet.com Weblogs

Links

Price-Oscillator Divergences Explained

Posted on October 30, 2009 at 14:40 in Education by James Chen

A few days ago, I led a webinar on the subject of price-oscillator divergences. There was a lot of interest in the subject, so I thought I would post the chart illustrations of the different kinds of divergences here, along with some explanations:

—————–

Bearish Regular Divergence – price makes a higher high while the oscillator makes a lower high. This is a warning or indication of a potential impending bearish reversal after an uptrend.

Bearish Regular Divergence

—————–

Bullish Regular Divergence – price makes a lower low while the oscillator makes a higher low. This is a warning or indication of a potential impending bullish reversal after a downtrend.

Bullish Regular Divergence

—————–

Bearish Hidden Divergence – price makes a lower high while the oscillator makes a higher high. This is a warning or indication of a potential downtrend continuation.

Bearish Hidden Divergence

—————–

Bullish Hidden Divergence – price makes a higher low while the oscillator makes a lower low. This is a warning or indication of a potential uptrend continuation.

Bullish Hidden Divergence

- James Chen, CTA, CMT

* For information on my book, Essentials of Foreign Exchange Trading (Wiley), please click here.

* Follow my intraday forex updates on Twitter: http://twitter.com/JamesChenFX

4 Responses to “Price-Oscillator Divergences Explained”

on 05 Nov 2009 at 4:42 am1e. mercado

thanks for this info, i didn’t know too much about the hidden divergence until reading your post. keep it coming!
on 06 Nov 2009 at 5:35 pm2James Chen

Thanks for your nice comment! Glad it helped!

James Chen
on 07 Nov 2009 at 2:39 pm3aco

thanks james is a wonderfull indicator. and is great.

I have a question. Is this working for any time frame? or

just higher time frames? thanks again
on 09 Nov 2009 at 4:04 pm4James Chen

Hi Aco,

Thanks for your question and for visiting this blog! To answer your question, divergences work on any timeframe. I tend to believe that they work somewhat better on longer timeframes, but there are traders that use divergences on even the shortest timeframes. Hope that helps! Thanks, Aco!

James Chen

Trackback URI | Comments RSS

Theme by Forex Street Powered by Wordpress

The comments and posts published in this blog ARE NOT trading recommendations. They can NEVER be considered as trading calls or advices. If you decide to use the information offered here for your real trading it is at your own risk.

Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.

Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. FXstreet.com has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: errors and Omissions may occur.

Any opinions, news, research, analyses, prices or other information contained on this website, by FXstreet.com, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. FXstreet.com will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.

The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer.

FX Path

Subscribe

Categories

Archives

Recent Comments

Next webinar

Tags

FXstreet.com Weblogs

Links

4 Responses to “Price-Oscillator Divergences Explained”

Leave a Reply