Newbies can now get involved in trading divergence using the Momentum Divergence Metatrader 4 forex indicator.
The indicator helps in spotting potential divergences formed with price action patterns.
The indicator plots a buy signal when the price bars creates a lower low and the Momentum Divergence plots a higher low at the same time.
This is interpreted as a bullish divergence.
A bearish divergence is said to take place when price bars forms a higher high, while the Momentum Divergence indicator makes a lower high.
Classic divergence takes place when the lines are solid, while reversed divergence occurs with dotted lines.
The USD/CHF H1 chart below displays the Momentum Divergence Metatrader 4 forex indicator in action.
Basic Trading Signals
Buy Signal: Go long when the green upward pointing arrow of the Momentum Divergence Metatrader 4 forex indicator pops up following a classic bullish divergence.
Sell Signal: Go short when the red downward pointing arrow of the Momentum Divergence Metatrader 4 forex indicator pops up following a classic bearish divergence.
Exit buy trade: Close all buy orders if while a bullish trend is running, the Momentum Divergence indicator displays a red downward pointing arrow.
Exit sell trade: Close all sell orders if while a bearish trend is ongoing, the Momentum Divergence indicator pops up a green upward pointing arrow.
Tips: The Momentum Divergence indicator draws all divergences automatically in the Momentum Divergence indicator window, making it easier to spot divergence
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: chart window indicator
Customization options: Variable (separator1, MomPeriod, separator2, MomPrice, separator3, drawDivergenceLines, displayAlert), width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Type: trend | divergence
Copy and paste the momentum-divergence.ex4 indicator into the MQL4 indicators folder of the Metatrader 4 trading platform.
You can access this folder from the top menu as follows:
File > Open Data Folder > MQL4 > Indicators (paste here)