💡 How to detect divergences and exploit them before others?
Price divergence is one of the strongest signals that gives you an early glimpse of a trend change, yet many overlook it.
🔹 What is divergence?
Divergence occurs when the price moves in one direction, but the indicator (such as RSI or MACD) moves in the opposite direction.
🔍 Positive Divergence:
The price records lower lows, but the indicator records higher lows → A signal for a potential rise.
🔍 Negative Divergence:
The price records higher highs, but the indicator records lower highs → A signal for a potential drop.
🔹 How to benefit from it?
📊 Use indicators like RSI or MACD.
📊 Monitor the highs and lows in price and the indicator.
Do not rely on it alone — combining it with support and resistance yields stronger results.
🔹 Practical Example:
The price of a currency started to gradually drop and touched a new low, but the RSI showed a higher low than before → A professional trader entered a buy early before the actual reversal.
📌 Next Lesson:
Can you trade without indicators? Discover the power of pure price action.
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