OsMA Divergence is a free Metatrader 4 Forex indicator that identifies bullish & bearish divergences between OsMA and price.
OsMA stands for Oscillator of a Moving Average.
The indicator draws the bullish and bearish divergences directly on the main MT4 chart window.
In essence, the indicator provides trend reversal signals in existing trends.
Buy & Sell Trade Example
- Go long when a bullish divergence gets printed on the chart.
- Go short when a bearish divergence gets printed on the chart.
The indicator works equally well on all currency pairs (majors, minors and exotic) and shows promising results if used correctly.
Free Download
Download the “OsMA_Divergence_v1.mq4” indicator for MT4
Indicator Chart (EUR/USD M30)
The picture below shows the OsMA Divergence mt4 indicator in action on the trading chart.
Trading Tips:
Feel free to use your own favorite trade entry, stop loss and take profit method to trade with the OsMA Divergence Forex indicator.
As always, trade in agreement with the overall trend and practice on a demo account first until you fully understand this indicator.
Please note that even the best trading indicator cannot yield a 100% win rate over long periods.
Indicator Specifications & Inputs:
Trading Platform: Developed for Metatrader 4 (MT4)
Currency pairs: Works for any pair
Time frames: Works for any time frame
Trade Style: Works for scalping, day trading and swing trading
Input Parameters: Variable (inputs tab), color settings & style
Indicator type: Divergence
Does the indicator repaint? No.
OsMA Divergence + CCI Histogram MT4 Scalping Strategy
This strategy uses the OsMA Divergence indicator to spot hidden or regular divergences between price and OsMA.
The CCI Histogram indicator gives trend momentum via blue (bullish) or red (bearish) histogram bars.
The idea is to enter on divergence that aligns with momentum from CCI, giving higher-probability scalps.
The CCI Histogram displays blue bars when the CCI trend is bullish, red bars when it’s bearish, and gray bars when flat.
Use it alongside price structure and divergence to confirm entries rather than trading solely on its signals.
Buy Entry Rules
- Look for a bullish divergence between price and OsMA (price making a lower low while OsMA makes a higher low).
- The OsMA Divergence indicator should plot its divergence red signal (often a line or marking).
- Confirm that the CCI Histogram is blue (indicating bullish momentum).
- Enter a buy at the close of the candle after the divergence is confirmed and the histogram turns blue (or remains blue).
- Stop loss: place below the recent swing low (or the swing low involved in the divergence), with a small buffer of a few pips.
- Take profit: aim for 1× to 1.5× your risk, or exit when the CCI Histogram turns red or when a reversal divergence appears on OsMA.
Sell Entry Rules
- Look for a bearish divergence between price and OsMA (price making a higher high while OsMA makes a lower high).
- The OsMA Divergence indicator should flag it.
- Confirm that the CCI Histogram is red (bearish momentum).
- Enter a sell at the close of the candle after confirmation of both divergence and the red histogram.
- Stop loss: place above the recent swing high (or high involved in divergence), with a small buffer.
- Take profit: aim for 1× to 1.5× risk, or exit when CCI Histogram turns blue or a bullish divergence appears.
Advantages
- Divergence gives early warning of potential reversals before the price fully reacts.
- The CCI Histogram helps you filter entries by momentum direction, reducing trades against trend.
- Works across multiple timeframes (M1, M5, M15) with the same logic.
- Scalping style keeps trade duration short, limiting exposure to sudden reversals.
Drawbacks
- Divergences sometimes fail or lag in strong trending markets—price might continue strongly despite divergence.
- The CCI Histogram may flip prematurely during choppy conditions, causing whipsaws.
- Scalping profit margins may be eaten by spreads and slippage, especially on smaller pairs or off-peak hours.
Case Study 1: EURUSD on M5
During the London session, the price created a lower low, while OsMA showed a higher low (bullish divergence).
The OsMA Divergence indicator flagged this.
Shortly after, the CCI Histogram turned blue.
A buy was entered at 1.1245. Stop loss was placed below the swing low at 1.1235 (10 pips).
Price climbed, and the target was hit at 1.1255 (10 pips). The histogram remained blue until exit.
Case Study 2: GBPUSD on M15
In the New York session, GBPUSD made a higher high, while OsMA registered a lower high (bearish divergence).
The divergence marker appeared. The CCI Histogram was red, confirming bearish momentum.
A sell was entered at 1.3108. Stop loss placed at 1.3120 (12 pips).
Price moved quickly downward, reaching 1.3095, triggering the take profit of 13 pips.
Exit was prompted by divergence resolution or histogram flipping.
Strategy Tips
- Use pairs with tight spreads and good liquidity to reduce slippage—EURUSD, GBPUSD, USDJPY are strong options.
- Prefer to trade in active sessions (London, New York) where momentum is stronger and divergences are more meaningful.
- Don’t force trades if divergence is weak or the histogram is ambiguous—wait for clean signals.
- Combine with basic support/resistance zones to strengthen your entries and exits.
- Consider scaling out: for example, take half the profit at 1× risk, let the remaining position run until the exit condition triggers.
- Backtest over several months to gauge win rate, average pip gain, and adjust your risk parameters accordingly.
This MT4 scalper strategy gives you structured entries and clear exit logic.
With the right discipline and risk controls, it can help you capture short, high-probability moves.
Download Now
Download the “OsMA_Divergence_v1.mq4” indicator for Metatrader 4
