In previous articles, we've raised the question at a glance divergence trading. Well, this time let's discuss more details about this trading divergence. What is actually divergence trading?
Basically, Divergence trading is trading using benchmark "difference" between the price movement with the movement of the oscillator indicator. You can use the MACD, RSI, Stochastic, and the like.
Divergence trading is very useful for us to be able to identify the moment when a trend will continue, or when a trend starts to slow down and the tendency to reverse direction. The ability to identify whether the trend will still be turned up or certainly we desperately need. Lah, we're certainly not want to "late entry" in following a trend. Still mending klo only late entry heck, even worse Klo to "go wrong" so that the tail in the valley sell or buy at the peak.
Ok, before using divergence to trade in, we need to first understand the basic theory in this trading divergence. In general, the divergence can be divided into regular divergence and hidden divergence. Regular Regular Divergence divergence generally show signs of reversal indication of the ongoing trend. If the position of the lower-price low while the oscillator in a position higher-low, showed indications of a trend reversal (reversal) of the down trend to trend up. For example, as shown below:
Meanwhile, if the price reaches a higer-high while the oscillator in the lower-high position, this condition shows no indication of a trend reversal (reversal) of the rising trend to trend down. For example, as shown below:
Hidden Divergence Hidden divergence general indication forwarding ongoing trend. If the higer-priced in the low position, while the lower-oscillators in the low position, is showing signs of rising trend will continue. Examples like the following picture:
Meanwhile, when prices in the lower position-high while the oscillator in higer-high position, is showing signs of descending trend will continue. For example, as shown below:
Well, the charts above show examples of divergence with different variations. It's good we can identify the occurrence of this divergence so that we can take the proper position at any price movement.
Well as of Bout diverging trading may bring benefits to you
