Force-Volume-Divergence Arrow Indicator: An Integrated Approach to Trading
Force-Volume-Divergence Arrow Indicator is based on 3 main components, which professional traders always use in their trading systems.
Principles underlying the Force-Volume-Divergence arrow indicator
- The power of the market
This is a very important aspect of technical analysis, which helps to recognize the emergence of new trend. If the new trend has a high strength index, in many cases it allows the trader to take a good profit. When a new trend shows a low strength index, the subsequent trend is always unstable and opening positions can lead to losses. Thus, it is very important to be able to determine the strength of the trend before opening a trade.
- Trading volume
It helps to determine the strength and stability of the market trend. An uptrend is considered strong and stable if volume is increasing and price is moving up. When price begins to decline and volume decreases, it always means that the uptrend is in its final phase. The price may still rise a little bit, but as soon as bears activate, the price starts to go down. And this can also be predicted with volume.
- Divergence
As you know, many professional traders often use different divergence indicatorsThe market is in the midst of a divergence, to decide whether to open a position or not. Divergence is an early indication of how the market will behave in the near future. Before the market price begins a reversal, it usually reaches its last peak and divergence shows us that the price does not have the strength to continue its movement in the same direction.
The Force-Volume-Divergence indicator is a combination of these main indicators and it shows us the best price levels to enter the market. The sell signals are presented in the form of arrows, which do not redraw or lag.
The authors state that Force-Volume-Divergence indicator will work best in scalping and intraday trading, because the most accurate signals will be on timeframes from M5 to H1. The indicator can be used to trade in the foreign exchange and stock markets.
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