thE hAnDbook of tEchnicAL AnALySiSNon‐confirmation occurs when the main and supporting data series are in dis-
agreement with each other. This means that the peaks and troughs in the supporting
data series are not moving in the same general direction with the peaks and troughs
in the main data series, implying a potential reversal or weakening of the current
larger trend. The oscillators indicate a possible decrease in price momentum. Non‐
confirmation is considered potentially more reliable if it is supported or corroborat-
ed by at least three weakly or non‐correlated supporting data series. See Figure 9.5
for non‐confirmation via single peak to peak and trough to trough analysis.
Figure 9.6 is a chart of the EURUSD foreign exchange pair. We see confirma-
tion and non‐confirmation at various points on the chart, from both adjacent
peak to peak as well as trough to trough analysis.
Figure 9.5 Non‐Confirmation via Adjacent Peak to Peak (Left) and Trough to Trough
(Right) Analysis Indicating Disagreement between Price and Oscillator.
Figure 9.6 Confirmation and Non‐Confirmation in the EURUSD via Adjacent Peak
to Peak and Trough to Trough Analysis.
Source: MetaTrader 4