Bullish & Bearish Reversal Divergence Trading in Forex🔍 Bullish & Bearish Reversal Divergence Trading in Forex: A Detailed Overview
Divergence is a powerful concept in technical analysis — it helps spot potential trend reversals and momentum shifts. Let’s dive into the details with clear strategies and some visual flair! 🚀
🧠 What is Divergence?
Divergence happens when price action and a technical indicator (like RSI, MACD, or Stochastic) move in opposite directions. This hints that the current trend is losing strength and a possible reversal is coming.
📈 Types of Divergence
🐂 Bullish Reversal Divergence (Buy Signal)
Price: Makes lower lows ⬇️
Indicator: Makes higher lows ⬆️
Meaning: Sellers are losing momentum; buyers might take over soon.
Signal: Potential uptrend reversal ahead.
🔑 Key Confirmation Tools:
Support zone bounce 🛑
Bullish candlestick patterns (Hammer, Engulfing) 🕯️
Increased buying volume 📊
💡 Example Setup:
RSI makes a higher low while price drops lower — prepare for a long (buy) position.
🐻 Bearish Reversal Divergence (Sell Signal)
Price: Makes higher highs ⬆️
Indicator: Makes lower highs ⬇️
Meaning: Buyers are losing strength; sellers could take control.
Signal: Potential downtrend reversal ahead.
🔑 Key Confirmation Tools:
Resistance zone rejection 🚧
Bearish candlestick patterns (Shooting Star, Engulfing) 🌑
Increased selling volume 📉
💡 Example Setup:
MACD makes a lower high while price pushes higher — prepare for a short (sell) position.
🛠️ Best Indicators for Divergence Trading
RSI (Relative Strength Index) – Tracks overbought/oversold conditions. 📊
MACD (Moving Average Convergence Divergence) – Measures momentum shifts. 💥
Stochastic Oscillator – Identifies trend strength and reversals. 🎢
🎯 Divergence Trading Strategies
1️⃣ Classic Divergence Strategy
Spot bullish or bearish divergence. 🔍
Confirm with support/resistance levels. 🧱
Wait for a reversal candlestick pattern (like a Doji, Engulfing, or Pin Bar). 🕯️
Enter trade with a tight stop loss below support (for buys) or above resistance (for sells). 🎯
2️⃣ Divergence + Trendline Break Strategy
Draw a trendline following the current trend. 📐
Spot divergence as the trend loses strength. 🚨
Wait for a trendline breakout for extra confirmation. 💥
Enter trade on the break and retest of the trendline. 💯
3️⃣ Divergence + Moving Average Strategy
Spot divergence between price and indicator. 📉
Use a moving average (MA) like the 50 EMA or 200 EMA to confirm the trend shift. 📈
Buy when price crosses above the MA after bullish divergence. 💚
Sell when price crosses below the MA after bearish divergence. ❤️
⚠️ Common Mistakes to Avoid
🚫 Ignoring confirmation: Always wait for candle closes or breakouts.
🚫 Forcing divergence: Only trade when divergence is clear.
🚫 Skipping risk management: Use a stop loss and position sizing.
🚫 Overtrading small timeframes: Higher timeframes (4H, Daily) offer more reliable signals.
Metals
GOLD (XAUUSD): One More Consolidation
Since Wednesday, Gold started to consolidate within a horizontal
channel on a 4H.
To buy Gold with a confirmation next week, wait for a breakout of
the resistance of the channel. It will initiate a movement higher at least to 2975.
Alternatively, a bearish breakout of a support of the channel can trigger
a local correctional movement at least to 2906.
Wait for a breakout, it will provide a reliable confirmation.
❤️Please, support my work with like, thank you!❤️
XAG/USD - Wedge Breakout (Weekly Forecast Feb 24-28)The XAG/USD Pair on the H4 timeframe presents a Potential Selling Opportunity due to a recent Formation of a Wedge Breakout Pattern. This suggests a shift in momentum towards the downside in the coming hours.
Possible Short Trade:
Entry: Consider Entering A Short Position around Trendline Of The Pattern.
Target Levels:
1st Support – 31.25
2nd Support – 30.67
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What Happens to Global Markets When the Ukraine-Russia War Ends?What Happens to Global Markets When the Ukraine-Russia War Ends?
The end of the Ukraine-Russia war will undoubtedly impact major global markets,
here’s what we can expect:
Oil Market : With tensions easing, oil prices could drop as supply concerns lessen and sanctions ease. However, global demand could still keep prices stable or even high.
Gold Market : Gold, a safe-haven asset, might face a decrease in demand as geopolitical uncertainty fades, but if the end of the war leads to global economic instability, gold could remain a strong choice for investors.
Forex Market : The end of the conflict could boost the Euro and USD as stability returns to the market. At the same time, the Russian Ruble might face fluctuations as Russia’s economy adjusts to post-war conditions.
Crypto Market : Cryptocurrencies may see mixed reactions—some may retreat as confidence in traditional markets rises, but others could flow in if economic uncertainty continues to prevail globally.
🔮 The war's end could bring hope, but it also presents new challenges for markets worldwide. Stay tuned to see how it all plays out!
GOLD SHORT | SELL THEORY [24/02-01/03]From what I’m seeing price is seemingly fatigued. There was a credible break on the 4H chart though - which is low-key worrying, HOWEVER on the daily chart? Sweeps on sweeps - which to me certify that price will be seeking a reversal of some sort at some point.
Once one of the printed lows gets violated by price (as drawn on the chart - with a candlestick) the sell will be confirmed.
I had a potential trade with actually played out nicely but I didn’t enter it, which I’m cool about as I wasn’t sure.
I won’t be trading Gold until I actually get confirmation.
Military Metals - Possible Head & Shoulders with a 2X potential Antimony is a buzz in the mining space. Military Metals is looking to capitalize on China’s market dominance by developing new antimony mines in North America. The chart suggests that the $5 million dollar market cap exploration company could be on the verge of a 2X move. I believe that any purchase under $0.35 would be a good buy for a move up to $0.65 and possibly beyond. Good luck.
BRIEFING Week #8 : Risk-Off move this weekHere's your weekly update ! Brought to you each weekend with years of track-record history..
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SILVER corrective pullbackThe Silver (XAGUSD) price action sentiment appears bullish, supported by the longer-term prevailing uptrend. The price action is creating a sequence of higher highs and higher lows. The recent consolidation appears to be a corrective pullback.
The key trading level is at 3197, which is the current swing low. A corrective pullback from the current levels and a bullish bounce back from the 3197 level could target the upside resistance at 3253 followed by the 3285 and 3316 levels over the longer timeframe.
Alternatively, a confirmed loss of 3197 support and a daily close below that level would negate the bullish outlook opening the way for a further retracement and a retest of 3166 support level followed by 3130.
This communication is for informational purposes only and should not be viewed as any form of recommendation as to a particular course of action or as investment advice. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. Opinions, estimates and assumptions expressed herein are made as of the date of this communication and are subject to change without notice. This communication has been prepared based upon information, including market prices, data and other information, believed to be reliable; however, Trade Nation does not warrant its completeness or accuracy. All market prices and market data contained in or attached to this communication are indicative and subject to change without notice.
Gold sideways consolidation below ATHThe GOLD (XAUUSD) index pair price action sentiment appears bullish, supported by the longer-term prevailing uptrend. The recent intraday price action appears to be an overbought consolidation after reaching the all time high on 20th Feb ‘25.
The key trading level is at 2900 level, the consolidation price range and also the current daily pivot level. A corrective pullback from the current levels and a bullish bounce back from the 2900 level could target the upside resistance at 2931 followed by the 2950 and 3000 levels over the longer timeframe.
Alternatively, a confirmed loss of the 2900 support and a daily close below that level would negate the bullish outlook opening the way for a further retracement and a retest of 2879 support level followed by 2865.
This communication is for informational purposes only and should not be viewed as any form of recommendation as to a particular course of action or as investment advice. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. Opinions, estimates and assumptions expressed herein are made as of the date of this communication and are subject to change without notice. This communication has been prepared based upon information, including market prices, data and other information, believed to be reliable; however, Trade Nation does not warrant its completeness or accuracy. All market prices and market data contained in or attached to this communication are indicative and subject to change without notice.
GOLD Is Going Down! Short!
Please, check our technical outlook for GOLD.
Time Frame: 4h
Current Trend: Bearish
Sentiment: Overbought (based on 7-period RSI)
Forecast: Bearish
The market is approaching a key horizontal level 2,936.271.
Considering the today's price action, probabilities will be high to see a movement to 2,899.545.
P.S
Overbought describes a period of time where there has been a significant and consistent upward move in price over a period of time without much pullback.
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GOLD → Retest of trend support before the NEWS FX:XAUUSD is forming a false breakdown of the lower boundary of consolidation and support of the uptrend within the correction. Traders are waiting for S&P Global PMI indices in the US.
The gold price has rolled back from the record $2,955, but still retains chances for growth continuation. The decline is due to profit taking as traders prepare for the release of the S&P Global PMI indices in the US.
The PMI data may affect the expectations for the Fed to cut interest rates. Nevertheless, a possible price drop on the back of strong PMI data could be short-lived if Trump's new tariff plans reignite demand for safe-haven assets.
While gold may continue to correct, any drawdowns are likely to be seen as a near-term buying opportunity
Resistance levels: 2933, 2939, 2946, 2955
Support levels: 2924, trend support
A false breakdown of the uptrend support is forming. If the bulls hold their defenses above the key area, gold may continue its rise in the short to medium term. But, the short-term outlook depends on the news
Regards R. Linda!
SPY/QQQ Plan Your Trade Afternoon Update : BREAKDOWNIf you've followed my research over the past 90+ days - you were ready for this move.
If you were positioned for this breakdown, many of you should have seen decent profits or green in your accounts.
I'm so happy and proud to have helped many of you prepare for this move.
Stay cautious into the close as we may see more selling pressure drive prices lower.
Remember, everything I do is about helping you become a better trader.
Get some.
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GOLD ROUTE MAP UPDATEHey Everyone,
We finish off another great week, with all our chart ideas playing out, as analysed.
After completing our Bullish targets yesterday, we stated that the last move up on the cross and lock gave over 200 pips but just short of the full gap at 2959. We also stated that, as long as we have no lock below 2928, we are good to buy dips into this range for now.
- This played out perfectly continuing to support above 2928, allowing us to buy dips safely
BULLISH TARGET
2890 - DONE
2928 - DONE
EMA5 CROSS AND LOCK ABOVE 2928 WILL OPEN THE FOLLOWING BULLISH TARGET
2959
We will now come back Sunday with our updated Multi time-frame analysis, Gold route map and trading plans for the week ahead and also a new Daily chart long term chart idea, now that this one is complete.
Have a smashing weekend!! And once again, thank you all for your likes, comments and follows, we really appreciate it!
Mr Gold
GoldViewFX
GOLD | Key Pivot Holding – Breakout or Rejection?GOLD Technical Analysis – February 21, 2025
Gold is currently trading within the pivot range at $2,935, showing consolidation. The price is still indecisive, and further movement depends on the next breakout.
The price is trying to touch $2918 from $2935, which means as long as trades below $2935.
📉 Bearish Scenario:
If Gold closes below $2,918 and confirms with a 4H candle, it may continue its decline toward $2,907 and $2,895.
A breakdown below $2,873 will extend losses toward $2,860 and $2,840.
📈 Bullish Scenario:
Stability above $2,935 could push the price toward $2,956 and $2,974 in the next bullish attempt.
A breakout above $2,974 may lead to further highs.
Key Levels:
Pivot Line: $2,935
Resistance Levels: $2945, $2,956, $2,974
Support Levels: $2,918, $2,895, $2,873
XAU/USD : First SHORT,then LONG! But...! (READ THE CAPTION)On the one-hour gold chart, we can see that yesterday, the price corrected from the $2943 level down to $2918 before encountering strong demand. This led to a bullish move, with gold reaching a new high of $2955 today. Before targeting the next resistance zone at $2966 - $2969, a slight pullback is likely. This analysis will be updated accordingly. Enjoy the ride, folks!
Please support me with your likes and comments to motivate me to share more analysis with you and share your opinion about the possible trend of this chart with me !
Best Regards , Arman Shaban
Sailing27db97e52ec7b1b43e5391bb5861b8d4cf37d3a7c3a1a06d3aa0533382d52733
Bitcoin's conservative addressable share of speculative assets is 2%.
The total market cap of the speculative portion of assets are as follows:
Real Estate: $2.14 trillion
Gold: $7.83 trillion
Silver: $108 billion (0.108 trillion)
Stock Market: $21.8 - $32.7 trillion (We'll consider the lower and upper estimates)
Bonds: $7.035 - $14.07 trillion
Total speculative market cap: $38.913 trillion to $56.848 trillion.
Conservative estimate for Bitcoin's share of this is 2%, or 0.778T-1.137T
The conservative multiplier for Bitcoin, is 118x. This means that for every $1 invested in Bitcoin, the market cap tends to increase by $118. Let's assume 10x instead.
0.778T-1.137T X 10 = 7.783T - 11.370T
Conservative projected price range 350k-666k
Market Cap details below:
Real Estate:
* Total Market Cap: $379.7 trillion
* Speculative Portion Market Cap: $2.14 trillion (Investment real estate)
* Speculative Portion: 0.56%
Gold:
* Total Market Cap: $19.57 trillion
* Speculative Portion Market Cap: $7.83 trillion
* Speculative Portion: 40%
Silver:
* Total Market Cap: $1.816 trillion
* Speculative Portion Market Cap: $108 billion
* Speculative Portion: 5.95%
Stock Market:
* Total Market Cap: $109 trillion
* Speculative Portion Market Cap: $21.8 - $32.7 trillion
* Speculative Portion: 20-30%
Bonds:
* Total Market Cap: $140.7 trillion
* Speculative Portion Market Cap: $7.035 - $14.07 trillion
* Speculative Portion: 5-10%
Silver INTRADAY bullish continuation energy build up The Silver (XAGUSD) price action sentiment appears bullish, supported by the longer-term prevailing uptrend.
The key trading level is at 3244, swing low. A corrective pullback from the current levels and a bullish bounce back from the 3244 level could target the upside resistance at 3340 followed by the 3400 and 3450 levels over the longer timeframe.
Alternatively, a confirmed loss of 3244 support and a daily close below that level would negate the bullish outlook opening a way for a further retracement and a retest of 3227 support level followed by 3197 and 3140.
This communication is for informational purposes only and should not be viewed as any form of recommendation as to a particular course of action or as investment advice. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. Opinions, estimates and assumptions expressed herein are made as of the date of this communication and are subject to change without notice. This communication has been prepared based upon information, including market prices, data and other information, believed to be reliable; however, Trade Nation does not warrant its completeness or accuracy. All market prices and market data contained in or attached to this communication are indicative and subject to change without notice.
SPY/QQQ Plan Your Trade For 2-21 : Top Pattern Counter TrendToday's Top pattern in Counter-Trend mode suggests the markets will attempt to move downward, seeking a new support level, then find a base and attempt to roll a bit higher.
I don't expect a big breakdown to take place today, but the YM is already struggling to maintain support - so we may see the ES/NQ break downward if the major markets continue to weaken throughout the day.
I do expect the markets to move into my Major Bottom pattern over the next 3-5+ trading days. So, overall, I expect the markets to reject these recent highs and attempt to move downward.
Gold and Silver should continue to rally with Gold trying to break above $3k and silver trying to break above $35.
Bitcoin is moving into an early stage Excess Phase Peak flagging formation. This should prompt a fairly solid rally phase for Bitcoin over the next few days/weeks.
If my longer-term research is correct, the recent new highs will be rejected and price will roll into a double-bottom type of setup between now and the end of March 2025.
I suspect traders are not prepared for this move and will continue to try to BUY any dip they see over the next 30+ days.
My only advice is to play the short-term trends and avoid position or swing trading too heavily.
The markets are going to become very volatile over the next 30+ days.
Get some.
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