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Divergence

Swing Trading Setup For The DAX 30 – Falling Wedge PatternHi Traders, Having a look at the DAX30 on the Daily. We see a potential falling wedge with accompanied divergence across the MACD. I would like to see a break and retest of this pattern before jumping in. This is the daily time frame so this would be quite a long swing position. It's all about patience haha. Let's see how it plays out. My target would be previous daily resistance. Enjoy your Monday! The Vortex Trader
OANDA:DE30EURLong
by TheVortexTrader
How to Trade Bullish DivergenceAt some point in your trading career, you will hear the term "Divergence Trading". Divergence simply means when the price and indicator are telling the trader two different things. It can be an effective addition to your trading strategy, especially if already using indicators like RSI or MACD to find overbought and oversold levels but should not be replied on by itself and requires practice to get it right. There are two types of Divergence you want to be familiar with: Regular bullish and bearish divergence and Hidden bullish and bearish divergence. In this educational tutorial, I will cover Bullish Divergence. You should note that the appearance of divergence doesn't happen 100% of the time, but when it does, you can use it for additional confluence (extra confirmation) for entering trades. Bullish Divergence Overview: A bullish divergence occurs when prices fall to a new low while an oscillator fails to reach a new low. This situation demonstrates that bears are losing power, and that bulls are ready to control the market again—often a bullish divergence marks the end of a downtrend. Notice in this example of GBPCAD, the price was in a downtrend and eventually came to a low at 5494 and rejected the area. The price shows a decline, while the RSI shows the oscillator moving higher. This is an example of regular bullish divergence, as it signaled a potential trend reversal. How to Draw Bullish Divergence You want to draw lines on successive tops and bottoms. Connect the tops and bottoms only, and keep your eyes on the price. If you draw a line connecting two lows on price, you MUST draw a line connecting two lows on the indicator. They have to match! Divergence only exists if the SLOPE of the line connecting the indicator tops/bottoms DIFFERS from the SLOPE of the line connecting the price tops/bottoms. Popular Indicators to Use When Identifying Divergence You can use indicators such as RSI, MACD, CCI, or Stochastic to trade divergence. Your selection in one of these indicators will depend on personal preference. I personally prefer the RSI at a 7 period. If you spot divergence but the price has already reversed and moved in one direction for some time, the divergence should be considered played out. You missed the boat this time. All you can do now is wait for another swing high/low to form and start your divergence search over. What is your favorite way to trade Divergence? Let me know in the comments! Happy Trading! :) - Brian & Kenya, BK FOREX ACADEMY
Education
by BKTradingAcademy
9
Ethereum ETHUSDT - Millennium Elliott Wave + 200 weekly MA!- As per my Elliott Wave analysis on the weekly scale, we have 2 impuls waves successfully completed and now we are missing the final impulse wave! - ABC correction (Wave 4) can be done, because wave 4 should not overlap the first wave. - 200 weekly moving average is currently acting as a very strong support! - Also the price is currently sitting on 0.786 fibonacci retracement. - If you take a look at RSI indicator, you can spot a bearish divergence from previous waves, which helps us to identify the Elliott wave structure. - Looks like the bear market can be over and we are ready for another massive bull market! - Check my related analysis for Bitcoin down below!
Long
by UnknownUnicorn2537518
3