![]() While divergences can occur between price and any other piece of data, they are most commonly used with technical indicators, especially with momentum oscillators.Įxamples of a momentum oscillator include the Commodity Channel Index ( CCI), Relative Strength Index ( RSI), Stochastic, and Williams %R. Daily RSI (5) for today is greater than daily RSI (5) for 15 days ago. ![]() Nice to see during price retests of previous highs. The bullish divergence setup looks at a stock that is trading within a long-range. Found during retracements in a downtrend. Nice to see during the price retest of previous lows. This occurs during retracements in an uptrend. Hidden divergences signal a possible trend continuation. ![]() Two ways to display Divergence: On the RSI Line or on the Overbought / Oversold Line. Warning of a possible trend direction change from an uptrend to a downtrend. The trader uses this rise above the 30 line as a trigger to go long. ![]() Warning of a possible trend direction change from a downtrend to an uptrend. Regular divergences signal a possible trend reversal. Since you’ve all be studying hard and not been cutting class, we’ve decided to help y’all out (cause we’re nice like that) by giving you a Divergence Trading Cheat Sheet to help you spot regular and hidden divergences quickly.
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