What is a regular divergence chart pattern?

Regular divergence chart patterns can be bullish or bearish. Regular divergence patterns indicate reversals. This is the most commonly known Forex divergence pattern and the divergence Forex meaning that most traders know. As mentioned, a divergence pattern does not mean that a reversal will take place right away.

How do traders find divergence patterns?

Traders can find divergence patterns by comparing the tops and bottoms on the price chart and comparing them to the divergence indicator. A higher high or lower low on the price that is not matched on the divergence indicator indicates divergence and a potential reversal now or soon.

What is a divergence indicator?

The divergence indicator is used for spotting regular and hidden divergence patterns. The divergence patterns are either bullish or bearish. Regular divergence patterns indicate that the trend is running out of momentum.

How to spot divergence in EURJPY chart?

In the EURJPY chart below the MACD indicator was used to spot the patterns to catch the move lower. Most traders just use the signal lines of the MACD to spot divergence. The more consistent way to catch true divergence patterns using the MACD is to spot the patterns on both the signal lines and the histogram simultaneously.