About Divergences

Beginner Questions
1

Hello everyone,

I got a question,

i was looking at a chart at daily timeframe, where i noticed a hidden bearish Divergence
where price did a Lower high and Stochastic did a Higher High.

The thing is that, the divergence had happened just at the previous candle, and the next one closed full bearish(and stochastic crossed 80.).

By saying the price did a Divergence, we mean the moment the candle closes and it has all the above criteria (stochastic etc) or, it may make a divergence during 3-4 candles until it goes the way divergences say…?

The divergence i am talking for is on EURUSD , Daily timeframe. were it did Lower high and stoch did Higher high but price has already fall. Is the divergence still on game??

Thank you for your time. =)

2

In a downtrend, divergence occurs when price makes a lower low, but the indicator does not. When divergence is spotted, there is a higher probability of a price retracement. One can not assume a result from a single chart as the Forex market is quite unpredictible.