Having trouble viewing this? Check out the online version.   Divergence: The Forex Crystal Ball Buy/Sell Pressure Divergence is the most accurate indicator that I use to predict price reversals in the Forex market. The Buy/Sell Pressure indicator measures the strength of a specific candle move by representing how many buyers or sellers are causing that price action. Green means there are more buyers in the market making up that candle's move and red means there are more sellers in the market driving price down. On the USD/CHF 60 minute chart you can see the green and red bars near the bottom. What do I mean by Buy/Sell Pressure Divergence? Divergence is when the buy/sell pressure indicates that the price should be moving in the opposite direction than what the current price is doing. For example, if price makes a new swing high say at 1.2059, we should expect buy pressure to also make a new high. When buy pressure can't make a new high, we have divergence. This is a strong signal that the market is going to reverse. Many traders like using divergence with an indicator like MACD, but that indicator lags the market and gets you into the trade too late. I'll give you a recent real market example that shows how quickly and accurately buy/sell divergence gets you into a trade. On 7/31/07 (the candle indicated by arrow #1) at 10:00 ET, price spiked to a new high of 1.20 65. If you look at the buy/sell pressure indicator near the bottom of the chart (indicated by arrow #2) not only did buy pressure not make a new high, it's red indicating sellers taking over the market. This is a clear sign that the bulls can't maintain those new highs and price is coming down. You can see from the chart, price immediately dropped from a high of 1.2065 to 1.1979 in less than a day which was an 86 pip gain on that short trade. A trader following this simple indicator could have entered the trade at or very near the high and participated in the full gain on the way down. This strategy can be used on smaller time frame charts like a 15 or 5 minute. It is also very powerful when combined with support/resistance indicators like pivot points and Fibonacci retracement levels giving the trader a lower risk, higher probability trade set up. Many followers of pivot point trading in particular get frustrated by not knowing which pivot points are going to hold. Buy/Sell divergence solves that problem by letting the trader know how strong the moves are going into those support and resistance levels. You no longer have to trade blind. DC Bonta has been amongst the most elite traders on the New York and American Stock Exchanges and has traded equities, options and Forex with firms such as Morgan Stanley and TD Waterhouse. His Forex trading strategies are available daily for Free on http://www.fxnationlive.com. 888.272.6608 | info@fxnationlive.com Here’s To Your FX Trading Success, DC Bonta, The world’s #1 FX money manager You have received this email as a participant of the FX Nation Live program...!unsubscribe_link! Risk Disclosure Unique experiences and past performances do not guarantee future results! Testimonials herein are unsolicited and are non-representative of all clients; certain accounts may have worse performance than that indicated. Trading stocks, futures, options and spot currencies involves substantial risk and there is always the potential for loss. Your trading results may vary. Because the risk factor is high in the foreign exchange market trading, only genuine "risk" funds should be used in such trading. If you do not have the extra capital that you can afford to lose, you should not trade in the foreign exchange market. No "safe" trading system has ever been devised, and no one can g uarantee profits or freedom from loss.  U.S. Government Required Disclaimer - Commodity Futures Trading Commission. Forex, Futures and options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This website is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this website. The past performance of any trading system or methodology is not necessarily indicative of future results. HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS. Substantial risk is involved. Forex trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the Forex markets. Don't trade with money you can't afford to lose. Nothing in our course or website shall be deemed a solicitation or an offer to Buy/sell futures and/or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on our site. Also, the past performance of any trading methodology is not necessarily indicative of futures results. Trading involves high risks and you can lose a lot of money.

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