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Home » What is Regular Divergence in Forex Trading?
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What is Regular Divergence in Forex Trading?

By Yasher RizwanJune 17, 2025No Comments2 Mins Read0 Views
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Regular divergence is a key technical analysis signal used to anticipate potential trend reversals in the forex market. It occurs when the movement of price and momentum indicators begin to disagree — often signaling that the current trend is weakening.

There are two main types of regular divergence:

  • ✅ Regular Bullish Divergence
  • ✅ Regular Bearish Divergence

✅ Regular Bullish Divergence

A regular bullish divergence appears when:

  • Price forms lower lows (LL)
  • But the oscillator forms higher lows (HL)

This setup typically occurs at the end of a downtrend and suggests a possible bullish reversal.

The reason? Momentum (represented by the oscillator) is no longer supporting the bearish price move. If the oscillator fails to confirm a new low while the price does, it signals a weakening downtrend — and a likely price rebound.

📉 Signal: Watch for the price to stop declining and start rising.


✅ Regular Bearish Divergence

A regular bearish divergence occurs when:

  • Price forms higher highs (HH)
  • But the oscillator forms lower highs (LH)

This typically happens during an uptrend and indicates that the bullish move may be losing strength.

If the price makes a new high, but the oscillator doesn’t confirm with a higher high, it may signal a potential trend reversal to the downside.

📈 Signal: Expect the price to drop after forming the second peak.


🔍 How to Use Regular Divergence

Regular divergence is best used when trying to identify market tops and bottoms. It acts as a warning that momentum is shifting, and the current trend may not be sustained much longer.

By paying attention to divergence between price action and indicators like:

  • RSI (Relative Strength Index)
  • MACD (Moving Average Convergence Divergence)
  • Stochastic Oscillator

…you can improve your chances of entering or exiting trades at optimal points.


What’s Next?

Now that you’ve learned about regular divergence, it’s time to uncover its lesser-known cousin: hidden divergence.

Don’t worry — it’s not buried deep like some market mystery. It’s simply hidden within the current trend and signals trend continuation rather than reversal.

➡️ Let’s dive into hidden divergence next.

Stay Educated with Daily Forex Pakistan.

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