Forex Binary Options Divergence and Convergence DeMarker Price Action Trading Strategy

BEST & EASY Forex Binary Options Divergence and Convergence DeMarker Price Action Trading Strategy -The great thing about divergences is that you can use them as a leading indicator, and after some practice, it’s not too difficult to spot.

Forex-Divergence-Convergence

Let’s first define the terms CONVERGENCE and DIVERGENCE.

  • CONVERGENCE in forex describes a condition under wich a new high in a price trend is confirmed by a corresponding new high on the oscillator (move in the same direction).

For instance, let’s assume a situation in which market prices show an uptrend, and so does our technical indicator.

In this case, we face continuing momentum, and there is a high probability that the trend will persist. So, here, the price and the technical indicator converge (i.e. follow the same direction), and the trader may refrain from sale, as the price is likely to further grow.

  • DIVERGENCE in forex describes a condition under wich a new high in a price trend is not confirmed by a corresponding new high on the oscillator, but instead, is contradicted as the oscillator registers a new low (move in opposite directions).

For instance, if we consider again a situation where market prices grow and the technical indicator’s value drops, we will face decreasing momentum, and thus signs of trend reversal.

Recommended Article:  ATR Ratio Forex Trading System Combines Whith Cycle Indicator and Trendline

The price and the technical indicator diverge, and therefore the trader may opt for running sale for procuring the highest profit.

So, basically, forex divergence trading and convergence trading focus on the same tools and mechanisms and embrace the same actions performed by the trader for evaluating market dynamics.

 

Divergence DeMarker Price Action Trading Strategy

You can use the trading system for Forex and Binary Options.

What if you believe a currency pair will continue to fall but would like to short at a better price or a less risky entry?

Well, guess what? There is a way! It’s called DIVERGENCE TRADING.

The best thing about divergences is that you’re usually buying near the bottom or selling near the top. This makes the risk on your trades are very small relative to your potential reward.

  • Best Time Frame: M5, M15, M30, H1, or higher
  • Recommended Currency Pairs: EURUSD, GBPUSD, and all major pairs

 

BUY Rules

Forex-Divergence-Convergence-BUY

  • The DeMarker Oscillator forms lower lows when the price action is forming higher high or The DeMarker Oscillator forms higher lows when the price action is forming higher high. This is a Bullish Divergence condition.
  • Open BUY when
    • Demarker Oscillator line upward above 0 level
    • Price upward above Tenkan-Sen line
    • Signal Trend green color bars
Recommended Article:  Forex Trading Course - How to Get 200 Pips A Week Easily Use Bollinger Bands in Forex and Stock Trading

 

SELL Rules

Forex-Divergence-Convergence-BUY

  • The DeMarker Oscillator forms lower lows when the price action is forming higher high or The DeMarker Oscillator forms higher lows when the price action is forming higher high. This is a Bullish Divergence condition.
  • Open SELL when
    • Demarker Oscillator line downward below 0 level
    • Price downward below Tenkan-Sen line
    • Signal Trend red color bars

 

Stop Loss

In this instance, the stop loss placed below previous swing low or above the previous swing high

 

Take Profit

The trader is at liberty to decide how to take profit in this instance. The choice can be made from a number of options:

  • Setting the TP at double or triple the number of pips that the stop loss was set at.
  • Using a reversal pattern to exit the trade.

This “Divergence and Convergence DeMarker Price Action Trading Strategy” can be traded on any time frame.



Leave a Reply

Your email address will not be published. Required fields are marked *




Powered by: ForexWOT Trading System
Privacy Policy    e-Mail: ForexWOT@gmail.com