The tools used in this trade example are FX Trend, FX Power and FX Volume - you'll find the product links right below
FX Trend / FX Trend MT5 - for the trend lines which can be used as trailing stop
FX Power / FX Power MT5 - for the unique time-period-based currency strength calculation
FX Volume / FX Volume MT5 - for the priceless insight of what really happens in the market
Here's an excellent example of divergence trading on a USDCAD chart,
with all lines hidden except the USD Net Long Volume and USD FX Power line.
1. The USD Net Long Volume rises
2. The USD strength drops
3. The USD strength snaps back to BUY and the trend move continues
The same happens at points 4, 5, and 6
4. The USD Net Long Volume rises
5. The USD strength drops
6. The USD strength snaps back to BUY and the trend move continues
This simple pattern works most of the time but not always because you have to consider News, etc.
However, trading these reversals provides a pretty outstanding risk-reward ratio.
Happy trading
Daniel
