The AO Divergence Bars Forex indicator is a pure price action trading indicator that works without any lag.
The AO Divergence price action indicator identifies profitable bull/bear divergences between price and indicator.
The indicator works great to trade low risk price reversals with good profit potential.
The EUR/USD H1 chart below shows you a great example of divergence between price and indicator.
The EUR/USD H1 divergence trade was a true winner that gained over 100 pips.
Feel free to experiment with the indicator’s parameters and values to suit your personal preferences.
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AO Divergence Bars Forex Indicator Chart
Here’s an example of how the indicator should look like when loaded onto the Metatrader 4 chart.
You can apply the indicator to any currency pair and time frame of your preference.
Finding Buy and Sell Triggers With AO Divergence Bars Forex Technical Analysis Chart Indicator
Below is an example of how to buy and sell currency pairs with this Forex indicator:
Buy Trigger: Open a buy trade when a bullish divergence pattern occurs between price and the AO Divergence Bars indicator.
Place initial stop loss slightly below the divergence pattern, or use your own stop loss placement method.
Close the buy trade for a reward to risk 2.0:1 ratio or better, or use your own favorite take profit method.
Alternatively, exit the divergence buy trade for a fixed take profit target, for example, 30 pips on the 5-minute trading chart.
Sell Trigger: Open a sell trade when a bearish divergence pattern occurs between price and the AO Divergence Bars indicator.
Place initial stop loss slightly above the divergence pattern, or use your own stop loss placement method.
Close the sell trade for a reward to risk 2.0:1 ratio or better, or use your own favorite take profit method.
Alternatively, exit the divergence sell trade for a fixed take profit target, for example, 75 pips on the 30-minute trading chart.
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Fast MA, slow MA, signal type 1, signal type 2, divergence bars, mode, colors, width, style.
The indicator can be used as a stand-alone signals indicator.
It can also be combined with:
- Trading oscillators (MACD, Stochastic, RSI,…)
- Trend indicators (Moving Average, Bollinger Bands, ADMI,…)
- Price action methods and techniques
More Info About This Indicator
Tradable Currency pairs: Any
Trading Platform: MT4
Time frames: M1, M5, M15, M30, H1, H4, D1, W1
Indicator Type: divergence
Copy and paste the indicator in the MT4 indicators data folder.
Then restart the MT4 terminal and attach it to any chart.