THE MOST

POWERFUL

TRADING STRATEGY

IN

TECHNICAL ANALYSIS

PROVEN STRATEGY TO HELP YOU TO MAKE PROFIT FROM FOREX TRADING

RICO.F.Y

TABLE OF CONTENT 1 Table of Content 2 Legal and Disclaimer 3 Preface 4 Traders Mindset 5 Money Management Techniques 6 Introduction to Divergence 8 Instructions 9 How to Trade Bearish Divergences 12 How to Trade Bullish Divergences 15 Examples of Trading 19 Conclusion

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LEGAL : No part of this publication may be reproduced, stored in a retrieval

system, or transmitted in any form or by any means without the prior written

permission of the copyright owner.

DISCLAIMER OF WARRANTY : while the author has used his best efforts in preparing

this e-book, he makes no representations or warranties in respect to the accuracy or

completeness of the contents. The advice and strategies contained herein may not be

appropriate for your situation. You should consult with a professional where

appropriate. The author shall not be responsible for any loss.

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Preface

Dear friends, thanks for download this e-book. First, I want to congratulate you, you

have chose this e-book, meaning you are a step ahead into a better trade. I spent

time to writing this e-book for you and all of the contents here are from my own

experiences in trading Forex.

Im a full time trader, I watch the market everyday. I found that trading divergence

is one of the best trading strategy! For me, trading divergence is my secret weapon

in trading Forex.

So, what now ?

Well, choose the strongest trading strategy !

But what is the strongest trading strategy ??

Im glad you ask because I know the answer. It is trading DIVERGENCE.

Successful traders out there already claim that DIVERGENCE is the best trading

strategy because its the strongest signal in technical analysis.

Note : keep in mind that trading IS NOT ONLY about the strategy you use, but your

MINDSET and MONEY MANAGEMENT these are key when you start to trade.

Visit my website www.daytradingboss.com to get Forex daily analysis

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TRADERS MINDSET

You must keep in mind that even with tested and profitable systems, you

still could have numerous losses in row. Being aware that this can and

will eventually occur can prepare you to control risk and not abandon

your trading system.

This confidence is an important mindset that you must develop in order

to be consistently profitable.

Here is a partial list of the traits you should develop :

Keep calm when trading

Focus on the present market

Absence of anger

Enjoy the process

Trade your plan and plan your trade

Dont feel victimized by the market

Take full responsibility for all trading results

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PROVEN MONEY MANAGEMENT TECHNIQUES

These are simple points to remember, but they all can make difference :

Always and always use stop loss

Never trade more than a 3% of your trading account size on any

given trade

Always trade with money you can afford to lose

Never trade with borrowed money

Stick to one trading strategy, do not change it everytime.

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What is Divergence ?

Divergence is the indication that an end to the current trend may be near

and occurs when the price of a security diverges from a value of technical indicator.

A bullish divergence occurs when a technical indicators is making new highs while

prices fail to reach new highs. A bearish divergence occurs when a technical

indicator is making new lows while prices fail to reach new lows. Both of these

divergences are most significant when they occur at relatively overbought/oversold

levels.

Here is example of bullish divergence :

As you can see on the chart (point A and B) price making a lower low, but indicator

(point 1 and 2) making a higher low. Price going up. This is BULLISH

DIVERGENCE.

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Here is example of bearish divergence : As you can see on the chart (point A and B) price making a higher high, but

indicator (point 1 and 2) making a lower high. Price going down. This is BEARISH

DIVERGENCE.

So you know what is divergence now. Its time to make money from it. Lets go !

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I believe that there is a power in simplicity, meaning the more simple it is, the better

we can trade. I found some traders using more than 5 indicators on their screen ,

some of them using 10 indicators ! Can you imagine how difficult and complicated it

is to see your own screen with those indicators ? So,simple is better.

Ok, open your Metatrader (I assume all of you can use Metatrader and know how

to add indicators) and follow these instructions :

1. Open any chart you want, example GBPUSD pair on 5 minute chart.

2. Use MACD indicator. Set to 5,34,1.

3. Use Stochastic Oscillator. Set to 30,10,10.

Here is an example screen : The colour of the screen and indicators have been changed. So dont panic if your

screen is not the same. Just adjust your screen using the most suitable way. The

most important things are you open the chart on M5 chart, use MACD (5,34,1) and

Stochastic Oscillator (30,10,10). Thats all.

Note : I didnt invent this strategy, I read some books and other sources, making

some adjustments and changes to it.

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How to trade bearish divergence :

1. Look for bearish divergence on MACD, after that you should confirm found

divergence on Stochastic Oscillator. Make sure both MACD and Stochastic are

divergences.

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2. Create a trend line on the price chart. Wait until breakout price. 10

3. Check Stochastic Oscillator. Look for crossover on Stochastic Oscillator.

Stochastic Oscillator is going down. Enter trade. Set take profit 15 pips and

stop loss 20 pips.

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How to trade bullish divergence :

1. Look for bullish divergence on MACD, after that you should confirm found

divergence on Stochastic Oscillator. Make sure both MACD and Stochastic are

divergences.

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2. Create a trend line on the price chart. Wait until breakout price.

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3. Check Stochastic Oscillator. Look for crossover on Stochastic Oscillator.

Stochastic Oscillator is going up. Enter trade. Set take profit 15 pips and stop

loss 20 pips.

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Here are examples from my divergence trading : 15

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So what do you think ? Its pretty simple, isnt it ?

Remember, DISCIPLINE ! There is nothing more important than being disciplined.

Just wait for indicators to show divergence, wait for breakout price and crossover

from Stochastic to enter trade. Always set stop loss ! For this strategy, set stop loss

20 pips and set take profit 15 pips.

NOTE : You can use this strategy for all time frames. The bigger

time frame you use, the better signal produced but less frequently. If

you use bigger time frame, means larger stop loss and larger profit

target. Just make sure you have good money management.

Thank you all. I hope you will trade better with this strategy. If you have something

to ask, please email me : iamricofy@gmail.com .

Good luck !

www.daytradingboss.com

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