Divergence Trading Strategy

1 year ago
36

So, how can you really trade a divergence trading strategy profitably.
How-to identify the following:
Regular Bullish divergence
Regular Bearish divergence
Hidden Bullish Divergence
And a Hidden Bearish divergence and trade them with confirmation.

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Divergence Trading Strategy
Divergence trading is a method of trading with a divergence pattern. The divergence in two prices is often used as an entry signal, but it can also be used as an exit signal. Using this technique can make your trade last longer, as it can alert you to changes in trend strength. Depending on which indicators you use, this strategy is effective on all market types and timeframes.

Divergence can be detected by drawing lines between the indicator's trendline and price chart. The divergence is when the indicator's trendline does not match the price chart. Traders can also use the CCI indicator to identify divergence in trading. After identifying the divergence, the next step is to decide which indicator to use.

Traders can use both H1 and H4 time frames to trade with divergence. In day trading, they can use the M15 time frame to watch higher time frames such as the H4. While day trading, it's best to use H4 to trade, since the H4 is more volatile than the M15, a divergence can be a visual trigger for a trade.

In addition to looking for divergence signals, traders can also watch for volume. A low volume will confirm that the price momentum has declined. If this is the case, traders can wait for another trend to emerge.

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