Hey everyone! I’ve been trading Forex for a few mnths now, and I recently stumbled upon the concept of divergence while analyzing my charts. 
Last week, I noticed that while the price was making higher highs, my favorite oscillator showed lower highs. It felt like I was missing something crucial! 
I want to understand how to interpret this divergence effectively. How does it signal potential reversals or trend continuations? Any personal experiences or tips would be super helpful! Thanks so much! 
Divergence can be a bit tricky at first, but once you get the hang of it, it’s super useful. Basically, when you see the price making higher highs but your oscillator shows lower highs, it’s often a sign of weakening momentum. This could indicate a potential reversal. Always look for confirmation from other indicators or price action before acting!
I’ve experienced this too! When I spot divergence, I usually wait for a candlestick pattern or another signal before entering a trade. For example, a bearish engulfing pattern after divergence can be a strong signal to sell. Keep practicing.
One thing to remember is that divergence can signal potential reversals, but it doesn’t always lead to them. It’s like the market’s way of giving you a heads-up. Try combining it with support/resistance levels for better accuracy!.
From my experience, the timeframe you’re using can affect how you interpret divergence. On higher timeframes, it can be more reliable for reversals, while on lower timeframes, it may indicate a temporary pullback instead.
I used to get confused by divergence too. What helped me was journaling my trades. I noted the divergence occurrences and what happened next. Over time, I started to notice patterns and get more comfortable with interpreting them!.
Divergence is all about momentum! If you see a divergence and the price is still trending, it might not be the right moment to jump in. Always watch for confirmation to avoid false signals. Good luck.
I find that RSI is a great oscillator for spotting divergence. When I see divergence on the RSI, I pay close attention to the next few candlesticks. It’s been a game changer for me in spotting potential reversals.