Momentum Divergence Indicator
Platform: MT4 Type: Momentum Last update: September 28, 2024The Momentum Divergence Indicator for MT4 automatically recognizes divergences between price and momentum indicator. It draws two lines: classic divergence takes place when the lines are solid, while reversed divergence occurs with dotted lines. Additionally, it marks the potential entry points with buy/sell arrows.
How to use the momentum divergence in practice?
The Momentum Divergence Indicator plots a buy signal when the price bars create a lower low and the Momentum Divergence plots a higher low at the same time. Conversely, a bearish divergence is considered to occur when price bars form a higher high, while the Momentum Divergence indicator makes a lower high.
Buy Signal
Follow these steps for a long trade:
- Momentum Divergence Indicator provides buy arrow
- Price swings higher from recent low swing
- Buy trade is triggered after the above conditions are met
- Set stop loss a few pips below the last swing low of the market
- Take profit or exit whenever the Momentum Divergence Indicator provides opposite signal or use your own method of trade exit
Sell Signal
Follow these steps for a short trade:
- Momentum Divergence Indicator provides sell arrow
- Price swings lower from recent high swing
- Sell trade is triggered after the above conditions are met
- Set stop loss a few pips above the last swing high of the market
- Take profit or exit whenever the Momentum Divergence Indicator provides opposite signal or use your own method of trade exit
