Divergence BTCUSD Setups

Divergence Trading Setup is one of the BTCUSD trade set ups used by Bitcoin traders. It involves looking at a crypto chart & one more indicator. For our examples we shall use MACD indicator.

To spot this trading setup find 2 chart points at which bitcoin price makes and forms a new swing high or a new swing low but MACD indicator doesn't, indicating a divergence setup between bitcoin cryptocurrency price and momentum.

To look for divergence we search for two points, 2 highs that form an M-shape on the Crypto chart or 2 lows that form a W Shape on the Bitcoin chart. Then look for the same M-shape or W-Shape on the Bitcoin indicator you use to trade.

Example of a Divergence Trading Setup:

In the cryptocurrency chart below we spot 2 chart points, point A and point B (swing highs). These 2 points form an M Shape on the bitcoin price chart.

Then using MACD indicator we check highs made by MACD, these are the highs that are directly below Chart points A ==22==and B.

We then plot one line on the Crypto chart and another line on the MACD indicator.

Cryptocurrency Divergence Trade Example on MACD Indicator - What is BTC/USD Divergence Trading?

Drawing Divergence BTCUSD Lines

The chart above shows an example of one of the 4 types of divergences, the one above is known as hidden bearish divergence, one of the best type to trade. Types of divergences are explained in the next lesson.

How to spot divergence

In order to identify diverging signal we check for the following:

HH=Higher High- 2 highs but the last one is higher
LH = Lower High : two highs but last is lower
HL = Higher Low - 2 lows but last is higher
LL = Lower Low - two lows but last is lower

First let us look at the exemplifications of these trading terms:

M-shapes dealing with BTCUSD Crypto price Highs

Higher High Higher Low Divergence Trading

W-Shapes dealing with BTCUSD price lows

Higher Low Lower Low Divergence Bitcoin Trading - Divergence Strategy Explained

Explanation of M-Shapes

M shapes on BTCUSD Chart - BTCUSD Divergence Trade Strategy Course Explained - Divergence Trader Strategy

Examples of W Shapes

W shapes on a Bitcoin Chart - Divergence Strategy Example Explained - How to Interpret/Analyze and Analyze Trade Divergence Example

Now that ==22==you'veyou--have learned the divergence terms that are used to explain setup. Let us look at the 2 types of divergences & how to trade these chart setups.

There two types are:

Classic Bitcoin Trade Divergence
Hidden BTC USD Trading Divergence

These 2 setups are explained on the following tutorials below

Learn More Courses & ==22==TutorialsGuidesCourses:

Trade Bitcoin Trading