The Power Of Divergence Trading

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The Power Of Divergence Trading

Author: admin | Total views: 212 | Word Count: 581 | Category: Forex trading signals | Date: Apr 7th 2008

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When it comes to trading, I'm sure you're familiar with following 'the trend'. Trading with the trend is a time-honored maxim among traders that should be self-evident. If you trade with the trend, the probability of being right increases – that is, until a divergence pattern occurs.

When divergence occurs, it may be best to stand aside or even trade against the trend based on the divergence pattern. For example, the classic bearish divergence pattern occurs when the market makes a higher high than the last swing high and at the same time a corresponding oscillator makes a lower high. When this occurs, the up trend may be stalling out and under certain conditions it may signal a reversal in trend. The reverse occurs with a bullish divergence pattern. If that didn't make sense to you, don't worry - it's covered in detail in the Super Divergence Blueprint.

Trading with the trend will always be a useful technique; however, you could be missing out on many potential trading opportunities and early identification of a trend reversal if you ignore the divergence pattern. The Super Divergence Blueprint can help you potentially harness the power of this pattern and should be a welcome addition to your growing toolkit of trading methods and techniques.

You can never predict the future, but what happens if the next time you're looking at a chart there's a potentially profitable divergence trade staring you straight in the face? Wouldn't you like to know what to do?

Simple Indicators + Simple Rules = A Potentially Powerful Method

The Super Divergence Blueprint uses just three common indicators - the exponential moving average, simple moving average envelopes, and stochastics. The key is in how you apply these three indicators and how they interact with each other.

Divergence can occur in two ways - as bearish divergence and as bullish divergence. I examine both types in great detail on my step-by-step CD-ROM videos. For each type of divergence, you will learn:

The General Case: This is the high-level blueprint of the patterns to look for that indicate a potential divergence trade.

Setup & Entry Signal: These are described in great detail and then applied to dozens of examples on several different charts.

Exit Rules: You'll learn where to exit a trade. Includes the use of a trailing stop to help maximize potential profits.

Money Management: These simple money management rules are a critical part of the Super Divergence Blueprint, or any trading method, for that matter.

Stock Screening Parameters: For stock traders, I provide some high-level screening parameters that should help you identify potential divergence candidates.

For all its potential power, I believe the true elegance of the Super Divergence Blueprint is in its simplicity. If you found a trading method that was relatively simple to apply and that gave you the potential to capture otherwise missed trading opportunities, wouldn't you be clamoring to add it to your own trading toolkit?

Imagine what it will feel like to have a potentially powerful new trading method in your personal trading toolkit, ready to be used at the next sign of divergence...

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When it comes to trading, I'm sure you're familiar with following 'the trend'. Trading with the trend is a time-honored maxim among traders that should be self-evident. If you trade with the trend, the probability of being right increases – that is, until a divergence pattern occurs. 
When divergence occurs, it may be best to stand aside or even trade against the trend based on the divergence pattern. For example, the classic bearish divergence pattern occurs when the market makes a higher high than the last swing high and at the same time a corresponding oscillator makes a lower high. When this occurs, the up trend may be stalling out and under certain conditions it may signal a reversal in trend. The reverse occurs with a bullish divergence pattern. If that didn't make sense to you, don't worry - it's covered in detail in the Super Divergence Blueprint. 
Trading with the trend will always be a useful technique; however, you could be missing out on many potential trading opportunities and early identification of a trend reversal if you ignore the divergence pattern. The Super Divergence Blueprint can help you potentially harness the power of this pattern and should be a welcome addition to your growing toolkit of trading methods and techniques. 
You can never predict the future, but what happens if the next time you're looking at a chart there's a potentially profitable divergence trade staring you straight in the face? Wouldn't you like to know what to do? 
<h2>Simple Indicators + Simple Rules = A Potentially Powerful Method</h2> 
The Super Divergence Blueprint uses just three common indicators - the exponential moving average, simple moving average envelopes, and stochastics. The key is in how you apply these three indicators and how they interact with each other. 
Divergence can occur in two ways - as bearish divergence and as bullish divergence. I examine both types in great detail on my step-by-step CD-ROM videos. For each type of divergence, you will learn: 
<ul> 
 <li>The General Case: This is the high-level blueprint of the patterns to look for that indicate a potential divergence trade.</li> 
 <li>Setup & Entry Signal: These are described in great detail and then applied to dozens of examples on several different charts.</li> 
 <li>Exit Rules: You'll learn where to exit a trade. Includes the use of a trailing stop to help maximize potential profits.</li> 
 <li>Money Management: These simple money management rules are a critical part of the Super Divergence Blueprint, or any trading method, for that matter.</li> 
 <li>Stock Screening Parameters: For stock traders, I provide some high-level screening parameters that should help you identify potential divergence candidates.</li> 
</ul> 
For all its potential power, I believe the true elegance of the Super Divergence Blueprint is in its simplicity. If you found a trading method that was relatively simple to apply and that gave you the potential to capture otherwise missed trading opportunities, wouldn't you be clamoring to add it to your own trading toolkit? 
Imagine what it will feel like to have a potentially powerful new trading method in your personal trading toolkit, ready to be used at the next sign of divergence... Article Source: <a href="http://www.easyforexstrategy.com" target="_blank">Easy Forex Strategy</a> About the Author: <a href="http://www.actionforex.com">Actionforex</a>