Hello everyone, fans of markets and charts (and maybe also of a good coffee in front of the screen)!
If you’ve landed on this blog, you probably share with me a certain curiosity – or perhaps a real passion – for the world of financial trading. Today I want to launch a series of content dedicated to a universe as fascinating as it is complex: Forex.
What is Forex Trading, in simple terms?
Many have heard of it, but perhaps not everyone has a crystal-clear idea. Forex stands for “Foreign Exchange” and is, essentially, the global market for currency trading. Think about it: every time a large company buys goods from abroad, or a tourist exchanges money for a trip, they participate, directly or indirectly, in this market. It’s the largest and most liquid market in the world, open 24 hours a day, five days a week. Here, traders try to profit from fluctuations in exchange rates between different currency pairs, such as the popular EUR/USD (Euro against US Dollar) or GBP/JPY (British Pound against Japanese Yen).
Sound complicated? It can be at first, but like any discipline, with study and practice, you can uncover truly interesting mechanisms and strategies.
A Taste of Technical Analysis: Divergences
One of the most powerful tools in the arsenal of a trader operating in Forex (but not only!) is technical analysis, and within this, a concept I find particularly enlightening is that of divergences.
Have you ever looked at a chart, the price of a currency continues to rise, making new highs, but an underlying technical indicator (like RSI or MACD) starts showing lower highs? Well, that’s a divergence! It’s as if the market is whispering to us: “Hey, watch out, the enthusiasm for this rally might be losing some steam…”. Divergences can signal potential trend reversals or confirm the strength of an ongoing move, offering valuable trading insights.
What’s Brewing on This Blog?
Precisely because I find these topics so stimulating (and, I hope, useful for you), I’ve decided to start sharing more material about them. Together, we will explore:
- The basics of Forex trading.
- In-depth looks at technical analysis.
- A special focus on divergences: how to recognize them, how to interpret them, and how to integrate them into a trading strategy.
And Speaking of Divergences… A Little Spoiler!
My passion for divergences led me to write a book entirely dedicated to this fascinating subject, titled “Winning Divergences: From Theory to Your Automatic Indicator” (original title: “Divergenze Vincenti: Dalla Teoria al Tuo Indicatore Automatico”). In this manual, I’ve tried to condense years of study and practice, explaining the theory simply and also providing a practical tool: an MQL5 indicator for MetaTrader 5 that I personally developed to automatically spot divergences.
If you’re curious to delve deeper right away and don’t want to wait for the next articles, you can check out the book (currently available in Italian) here: Winning Divergences on Amazon.it
In the upcoming posts, however, we’ll revisit many of the key concepts, so stay tuned!
Get your questions and your eagerness to learn ready, because an interesting journey into the world of trading awaits us.
See you soon!
Enrico