8 principles of dealing with divergences Divergence

Previous article was briefed about the divergence and the basic steps to deal with this signal , the engine generally supported Divergence trend forecasting EARLY, so the analysis process must have encountered credits interference. Over time many professionals experience summed 9 principles to analyze divergence.
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1. Top / Bottom clear - Easy to identify

Must see clearly the creation candle top / bottom detail, looking at the realized immediately, without having tried to figure out.

The chart on top with a clear view before (Previous) and higher current peak, is very recognizable and credible case.

Warning! Inapplicable divergence in market conditions does not tend, when Sideway always create signal interference and Momentum Indicator lines will create divergence error signal, so the only way interstitial channels SW horizontal price for convenience when Channel Breakout. Not only divergences, a lot of tactics applied only when the market Trend alone, at times SW must be avoided.

2. The gap between the two top / bottom is no "third person"

Ie in the middle of the 2 top or bottom of the chart price is not more top / bottom, like the illustration above, the two top if there any other peak, though not high by the first peak is still being deemed invalid, defective models and to ignore this signal immediately.

3. Do not be distracted consecutive Divergence

Analyzing current signal, you should not make the problem more complicated by retrospective and further draw the signs earlier.

4. interest in Peak / Bottom - Never mind nhuwgx else

Identifying the Top / Bottom right, the distance bumpy on Stochastic, RSI, MACD let through, simply notice the top / bottom.

5. Always connect the top / bottom on Chart match Peak / Bottom on Momentum Indicator

Because there are too many passages winding up sometimes you confused, alternating the Trendline goes against the grain, the second photo is wrong then, to connect the Top / Bottom Chart identical in price and top / bottom of Stochastic.

6. Both have the same convergence and divergence

This sixth principle refers to the act on the same chart and Indicator right, ie when there is peak on Chart Indicator to converge, when the present time there is a new peak, the coral should Indicator

Photo on top along with the convergence on Stochastic.

7. confirmation of Price

After diverging happen to have comfirmation by candlelight next bar, for example, the phasing next reversal bars should be increased and vice versa.

8. If you missed the train then wait another chance

If you do not catch the wave had run a piece price then wait for another opportunity. Depending on the price charts that can trade long term or just surfing, the average chart M15 - M30 is a short-term chart makes for key sticking by the command, if long-term trade on the H4 Chart longer hold command.

Above are 9 leading principle when analyzing signal phasing Trend with divergences, look on MT4, you will often see the signs.
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