Sunday, March 3, 2013

Lower high following divergence, higher low following divergence

EUR 1 Mar

Probably not that often that you see sell divergence followed by a lower high and buy divergence followed by a higher low in the same day.

London open move higher does not follow through. 1hr big upper wick on the doji. 15 min divergence, lower high for move back into trend.

At London close time slot we have 2 x 1hr hammers/dojis. 15 min higher low following divergence at W S2.

Whilst its a great tool to give advance warning of a potential move, you never know when divergence will play out. In the higher low/lower high following divergence price action is giving confirmation of the divergence to validate the trade.



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