During the years Ive been trading, I have developed my own Forex methods of analyzing market divergences, which I found to be highly accurate.

Divergences are used by some of the worlds top Forex traders since they provide a unique insight into the underlying forces that drive the market, forces which are hidden from the rest of the crowd.

When certain types of divergence occur, they reveal mistakes in price action. And when the market realizes prices are wrong, the market quickly and violently fixes it. I want to be in before the market realizes the mistake, and thats where the power of divergences is.

Divergences are tricky to spot and identify, and even more tricky to teach the computer how to spot them! Yes, I know there are some divergence indicators around the net, but I didnt find them accurate enough for my purposes. Thats why up until now, I was only analyzing divergences manually.

If youre a member of my Forex community, youve probably heard the slogan Divergences Never Lie ! Divergences can begin later than they are spotted, but eventually they appear.

The ways to trade divergences are as many as the ways to trade a trend. But the idea is the same:

1. Recognize an extreme area;

2. Confirm on a higher time frame;

3. Get your ok from the indicators;

4. and you have a great setup.

Statistics always balance out!

This is a concept I believe in that gets confirmed to me on a daily basis in all aspects of life. I am a big believer of statistics and numbers. And the longer you do something and get similar results, the more reliable those results become.

The day I remember becoming such a devote believer in statistics and made it click in my head was perhaps, unusual, but nonetheless true: It was during a basketball game in 2004 between Zalgiris Kaunas and Maccabi Tel Aviv.

In this game, Zalgiris had to win, but in the end they lost, because of statistics (well, some luck helped also but the numbers did the job. It was 2.2 seconds, and Zalgiris was leading by 3 points. Their star player was about to take 2 free shots after a foul. This was a player had succeeded in 90% of his shots.

In this particular game until then he was 6 for 6, or 100% success. And like I said in the beginning, statistics RULE. Thats what happened here: Zalgiris star player missed his two shots! Putting him closer to where he had been for the last few years, at 90%.

A player with 100% success missing 2 shots? Wait, thats not the craziest thing that happened in this game. Right after that it was Maccabi Tel Avivs ball and they started it from their own half court. Their coach asked to throw the ball to Derek Sharp, one of the three point shooters for Tel Aviv.

Many people were shocked at why he didnt want to give the ball to the hottest player that day, Sarunas Jasikevicius. But he is the coach and no one can argue with him. Sharp got the ball and made an IMPOSSIBLE 3 point throw, and it went in. Probably the most incredible shot ever and one of the most exciting moments for basketball fans!

After that, in additional time, Maccabi Tel Aviv won. At the end of the game all journalists asked the Tel Aviv coach why he chose to give the last ball to Sharp who wasnt at the top of his game and not to Jasikevicius who was hot?

He answered: Sharp normally has around 45% success rate of 3 points during his carrier, and today he had around 20% only, Sarunas also has 45% and today had more than 50% success rate of 3 points. Based on statistics, the chances that Sarunas will miss are bigger than the chances that Sharp will miss. That was a real wake up call for me.

Since that evening I am the biggest believer of statistics!

As I mentioned earlier, The LST System, is a statistical-hybrid Forex system based upon powerful and automated divergence analysis, taking advantage of the cyclical movement of currencies prices in the Forex market.

LST stands for: Learn. Simulate and Trade. This is always my advice for my students and traders:

Learn the system and once youre sure you fully understand it, trade it on the unique LST Simulator. Once you feel comfortable and dominate the rules – it is time to trade real money!