Forex Education

Trading industry knowledge. Learn forex trading, investing in stocks, commodities.

  • Home
  • Choose a broker
  • Best Forex Brokers
  • Learn trading
  • Affiliate
  • Contact
  • About us
Home » Indicators » Divergence Cheat Sheet

Divergence Cheat Sheet

by Fxigor

Table of Contents

  • What is a divergence in forex trading?
  • Divergence Cheat Sheet
  • Divergence Bias
  • Cheat Sheet for Regular Divergence
  • Cheat Sheet for Hidden Divergence
  • Conclusion

Trading in a stock market can be easy if the trader is well aware of different indicators and technical analyses. These indicators and technical analysis can help traders gain the desired outcome. 

One such popular technical analysis is divergence. A trader who has been trading for quite some time now will be well aware of how this technical analysis, combined with an efficient indicator, can be instrumental in predicting the market. 

What is a divergence in forex trading?

Divergence is the price movement process when an asset’s price (currency pair) moves in the opposite direction of a technical indicator, usually an oscillator. Divergence warns that the current price trend may lead to a price-changing direction.

free course banner

fxpro android ad
fxpro android ad
100% bonus hotforex
100% bonus hotforex
trade ETF
supercharged bonus hotforex ad
hfm zerpo spread ad
gold trading hotforex ad
crypto trading capital ad
gold trading capital ad
low spread trading capital ad
crypto trading capital ad
gold trading capital ad
low spread trading capital ad

Divergence indicates whether the ongoing trend will continue or reverse in the trend. This interpretation becomes more convenient when a trader has subsequent knowledge of what type of divergence means in which situation.

Divergence Cheat Sheet

In this Divergence Cheat Sheet, you will get video, free mt4 divergence indicator, and knowledge on how to use divergence situations when asset price goes in one direction and oscillator goes in another direction.

To download the free divergence indicator please visit our download section.

Traditionally, there are two types of divergence, namely, Regular Divergence and Hidden Divergence. The divergence shows different predictions, and understanding them ultimately can work as a divergence cheat sheet for the trader.

free course banner
fxpro android ad
fxpro android ad
100% bonus hotforex
100% bonus hotforex
trade ETF
supercharged bonus hotforex ad
hfm zerpo spread ad
gold trading hotforex ad
crypto trading capital ad
gold trading capital ad
low spread trading capital ad
crypto trading capital ad
gold trading capital ad
low spread trading capital ad

 

Divergence Bias

Before getting into the cheat sheet, it is essential to understand the word bias in divergence. Any prediction that may arise due to the above divergences will have a bearish or bullish bias. Bias means the strong signal that the divergence is creating. It becomes more evident when one learns about the two types of divergences. 

Let’s read the cheat sheet to help a trader understand the hidden divergence and the regular divergence more clearly. 

Cheat Sheet for Regular Divergence

A regular divergence signals an expected reversal in the current trend. The standard divergence bias shows how the possible reversal may take place. 

fxpro android ad
fxpro android ad
100% bonus hotforex
100% bonus hotforex
trade ETF
supercharged bonus hotforex ad
hfm zerpo spread ad
gold trading hotforex ad
crypto trading capital ad
gold trading capital ad
low spread trading capital ad
crypto trading capital ad
gold trading capital ad
low spread trading capital ad

bullish divergence

Following are the two types of common divergence bias and what they indicate. 

  • Regular Bullish Divergence: In this case, the market shows the security price at a lower low, but the indicator or oscillator shows a higher low. This situation indicates that the bearish trend is losing its strength, and a possible bullish trend is taking a powerful position. Hence, the possibility of a trend reversal from bearish to bullish. 
  • Regular Bearish Divergence: Another case is when the market shows the price at a higher high, but the oscillator or indicator shows a lower high. This situation is bearish bias as it indicates that the bullish trend is no longer powerful, and the bearish trend may take over. Therefore, a possible problem of a trend reversal from bullish to bearish. 

bearish divergence

Cheat Sheet for Hidden Divergence

Unlike the Regular Divergence, the Hidden Divergence indicates that the current trend may continue. The bias of hidden divergence means in which direction the trend is likely to continue. 

 

Following are the two types of hidden divergence bias and what they indicate. 

fxpro android ad
fxpro android ad
100% bonus hotforex
100% bonus hotforex
trade ETF
supercharged bonus hotforex ad
hfm zerpo spread ad
gold trading hotforex ad
crypto trading capital ad
gold trading capital ad
low spread trading capital ad
crypto trading capital ad
gold trading capital ad
low spread trading capital ad
  • Hidden Bearish Divergence: when the price shows a lower high, but the indicator reflects a higher high, the trader can expect the situation to be bear bias. , the bearish or downward trend is expected to continue. In such cases, the traders take selling positions. 
  • Hidden Bullish Divergence: when the market price of the security is at a higher low, but the oscillator reflects a lower low; the trend is bull bias. In this case, the trader can expect a bullish or upward trend. Thus, this is expected to be a perfect time for traders to enter or re-enter the market. 

See hidden bearish divergence:

hidden bearish divergence

 

Understanding divergences is not very complicated. Just a thorough read and a little practice can make traders use divergence to make predictions in the market. But, it is essential to know that using a technical indicator is necessary for making these predictions. Without an indicator, the trader can not ascertain the movement of the trend. This becomes even more crucial when using a momentum oscillator like RSI (Relative Strength Index), CCI (Commodity Channel Index), or Williams %R.  

Conclusion

Please read the two types of divergences and their biases to predict the security or commodity market. Then, the cheat sheet can help the trader ascertain their entry or exit from the market and make decisions according to the predictions.

  • Author
  • Recent Posts
Fxigor
Fxigor
Trader since 2007. Currently work for several prop trading companies.
Fxigor
Latest posts by Fxigor (see all)
  • Gold Head and Shoulders Pattern
  • Calculate Crude Oil Lot Size – How to Read Oil Pips?
  • Capital.com Review

Related posts:

  1. What is Triple Divergence?
  2. Download RSI Divergence Indicator for MT4
  3. The Best Divergence Trading Strategy
  4. Download MACD Divergence Indicator MT4!
  5. Avatrade Bonus Terms
  6. Bullish and Bearish Divergence in Details
  7. What is a Deal Sheet?
  8. Free Download True Strength Index TSI Indicator
  9. MBFX Timing Indicator – Free download MT4 Indicator
  10. Download QQE Indicator! How to use QQE Indicator?
  11. What is the Best Momentum Indicator?

fxpro android ad
fxpro android ad
100% bonus hotforex
100% bonus hotforex
trade ETF
supercharged bonus hotforex ad
hfm zerpo spread ad
gold trading hotforex ad
crypto trading capital ad
gold trading capital ad
low spread trading capital ad
crypto trading capital ad
gold trading capital ad
low spread trading capital ad

Filed Under: Indicators

Trade gold and silver. Visit the broker's page and start trading high liquidity spot metals - the most traded instruments in the world.

Trade Gold & Silver

Diversify your savings with a gold IRA.

Gold & silver portfolio-building assistance from product professionals.

VISIT GOLD IRA COMPANY

fxpro android ad
fxpro android ad
100% bonus hotforex
100% bonus hotforex
trade ETF
supercharged bonus hotforex ad
hfm zerpo spread ad
gold trading hotforex ad
crypto trading capital ad
gold trading capital ad
low spread trading capital ad
crypto trading capital ad
gold trading capital ad
low spread trading capital ad

Website categories

Main Forex Info

  • Forex Calendar 2022
  • Forex Holidays Calendar 2022 – Holidays Around the World
  • Non-Farm Payroll Dates 2022.
  • Key Economic Indicators For a Country
  • The Best Forex Brokers of 2022 (Ranked & Reviewed)
  • Best Forex Brokers by Monthly Traffic of 2022
  • Free Forex Account Without Deposit in Summer of 2022.
  • What is PAMM in Forex? Are PAMM Accounts Safe?
  • Stock Exchange Trading Hours
  • Which Forex Broker Accept Paypal? – PayPal brokers

Main navigation:

  • Home
  • About us
  • Forex brokers reviews
  • Investment
  • Education
  • Privacy Policy
  • Risk Disclaimer
  • Contact us

Forex social network

  • RSS
  • Twitter
  • FxIgor Youtube Channel
  • Sign Up. Get newsletter.

Spanish language

Spanish language website
Risk Warning: Trading leveraged products such as Forex and CFDs may not be suitable for all investors as they carry a high degree of risk to your capital. Trading such products is risky and you may lose all of your invested capital. Before deciding to trade, please ensure that you understand the risks involved, taking into account your investment objectives and level of experience.

Copyright Forex.in.rs 2007

Privacy Policy