In previous articles I have discussed the Regular and Hidden Divergence Trading, so this time I will discuss about Divergence Trading Method in applying it to gain pips.

Here I'll show an example when there is some difference between the price movements and the oscillator. First, let's see regular divergence. Below is a daily chart of USD / CHF.


We can see the trendline that USD / CHF declining trend in the movement. However, there are signs that the downtrend movement coming to an end. Price has formed a lower low, and stochastic (indicators that I use), showed a higher low.

But before you need to consider, it seems there is something fishy here. Is the reversal of the previous price movement will soon occur? And whether it's time to do open positions?


If you answered yes to that last question, then you will generate a lot of pips. Before we proceed, if you see a tweezer bottom formed on the second lower low?

Where This would provide a more confirmation that a trend will end soon, which gives more reason to believe in the divergence. Next, let's look at an example of hidden divergence. Once again, let's look at the daily chart of USD / CHF.


Here we will see that a pair is in a downtrend pregerakan. Notice how prices form a lower high but the stochastic is forming higher high. According to my notes, this is a bearish hidden divergence, what should we do? While time moves back up?

If you are unsure, you can sit back and watch the price movement for a while.


Furthermore, if the trend continues down and getting down, then the price will bounce off the trend line and finally jump up to almost 2000 pips. Rather tempting ....