top of page

Trading Divergence/Convergence


Hey NVP I hope that you are doing good. What do you think about potential spread trading? I was thinking that maybe it won't be bad to look for wide spreads between two currencies but instead of watching to buy stronger currencies, I am watching that spread will eventually back into normal between two currencies, which mean spread will decrease. Of course, I will like to currencies to start decreasing the spread before the eventual entry and of course price action must go with it

Hi peter - hope you are well my friend so - are you are talking about finding the 2 most divergent currencies and trading the convergence ? ......yes thats a pretty standard approach that i have talked about a lot over the years on my trade2win forum .........2-3 years or more back in truth i rarely trade that strategy as i mainly chase trends....but it can be very effective if combined with the usual other o/b o/s indicators on the pair chart identified as alpha divergent in the g8 ..........like BBs and RSIs etc ..........you could easily combine price action patterns and perhaps some S/R levels to complete the strategy you will normally find that CAD , Yen and GBP will dominate this strategy in pairs .....because they are the most volatile normally ........interestingly if yuo found an alpha divergence with currencies that are not on this trio that indeed would probably be worth looking at for a retrace trade look at below ....5 min london morning on a 20ma FXCorrelator see how the Yellow yen , red gbp and brown cad are ALWAYS either max or min value currency ? sure some of them do reverse ..but the skew of the MA will always look better than it normally is happy to talk more on this my friend ........... had a great morning selling Cable today

heres a 1hour chart 20 ma FXCorrelator 20 ma BB on 2 standard devs so i look for retrace trades when red GBP and yellow Yen are max and min currencies vs zero line is it a strategy ......sure its not too bad ......just sprinkle in some additional price action confirmation .....perhaps some S/R confluence ...... ive discussed this at length in many many posts a few years back and its not too bad I scalp and trade on much higher probability signals than these ...but then again perhaps i am missing something N


 
 
 

Recent Posts

See All
FXCorrelator - Adieu ! (?)

hey all ....with my last blog Post nearly a year ago here - its pretty damn clear that my other projects and ventures have taken me far...

 
 
 

Comments


© 2023 by Walkaway. Proudly created with Wix.com

Website and Video Disclaimer: Any Advice or information on this website is General Advice Only - It does not take into account your personal circumstances, please do not trade or invest based solely on this information. By Viewing any material or using the information within this site you agree that this is general education material and you will not hold any person such as myself or entity responsible for loss or damages resulting from the content or general advice provided here by FXCORRELATOR.com, it's employees, directors or fellow members. Futures, options & spot currency trading have large potential rewards, but also carry large potential risk. You must be aware of all the risks & 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 or Sell futures, forex, cfd's, options or other financial products. No representation is being made that any account will or is likely to achieve profits/losses similar to those discussed in any material on this website. The past performance of any trading system or strategy is not necessarily indicative of future results. Any information, news, research, analysis, prices, or other analysis contained on this website is provided as general market commentary & does not constitute investment advice. We will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information. Copyright@2018 FXCORRELATOR.COM 

  • Facebook Black Round
  • Google+ - Black Circle
  • Twitter Black Round
bottom of page