Will the divergence work on USD/CAD

12.09.2017 / 13:31

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USD/CAD registered a divergence price/indicator, meaning lower lows on the price and higher lows on the indicator.

This means, that the price has moved inertial and has not been supported by the markets power. At such times, even the smallest purchase can reverse the movement.

In this case, we also have a bullish pin bar at the bottom of the movement, which increases the chance of reversing. This does not mean that the movement will turn 100%, but the probability increases. In this situation, if someone trades reversal he can position himself in two ways. One is to wait for the price to pass over 1.2164 and the other is to get in the deal now, as the correction of the pin bar allows us to purchase at very good levels with shorter stop, and the price is not below the low of the bar.

Mandatory SL at least 15 pips below the low

The divergence gives us a good ratio TP/SL, however they don't work that often.

Here are some other kinds of divergences:

Стефан Димов Ангелов - Head of Stocks Trading

Varchev Traders

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Will the divergence work on USD/CAD

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