The tools used in this trade example are FX Trend, FX Power and FX Volume – you’ll find the product links right below
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
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
This works most of the time but not always because you have to consider News, but trading these reversals provides a pretty great risk-reward ratio.
Especially around the London Opening, the USD Net Long Volume is an outstanding indication for what happens the next hours.