Trading Bitcoin Interpret Divergence Signal in Bitcoin Trading
Interpret Divergence Signal in Bitcoin Trading? - Divergence Signal cryptocurrency trading setup is one of the bitcoin trading strategy used by bitcoin traders - divergence bitcoin trading involves looking at a bitcoin chart & one more cryptocurrency indicator. For our bitcoin divergence examples we shall use the MACD bitcoin technical indicator.
To identify this bitcoin divergence setup find 2 bitcoin chart points at which he bitcoin price makes a new swing high or a new swing low but the MACD technical indicator does not, thus illustrating a cryptocurrency trading divergence between the bitcoin price & momentum.
To look for divergence cryptocurrency signal we look for two chart points on a bitcoin chart - 2 bitcoin price highs that form an M shape on the btcusd chart or two bitcoin price lows that form a W-Shape on the btcusd chart. Then look for the same M-shape or WShape on the technical indicator that you use to trade bitcoin - for examples RSI indicator or MACD bitcoin technical technical indicator.
Trading Bitcoin Interpret Different Types of Bitcoin Divergence Signal Trading Signals
In the btcusd chart below we spot two bitcoin chart points, chart point A & chart point B - swing highs. These 2 bitcoin chart points form an M shape on the bitcoin chart.
Then using MACD btcusd technical technical indicator we check the highs made by the MACD cryptocurrency technical indicator, these are highs which are directly below Chart point A & Chart point B.
We then draw one line on the btcusd chart & another line on the MACD technical indicator.
Trading Crypto Interpret Divergence Signal in Crypto Trading? - How Do I Analyze Crypto Divergence Signals?
The bitcoin chart above shows example of one of the 4 different types of bitcoin divergence trading setups, the bitcoin divergence trading setup above is known as hidden bearish bitcoin trading divergence.
How to Analyze divergence bitcoin trading setup
In order to Analyze divergence cryptocurrency trading signal we look for the following:
- HH - Higher High - two highs but the last one is higher
- LH - Lower High - two highs but the last one is lower
- HL - Higher Low - 2 lows but the last one is higher
- LL - Lower Low - two lows but the last one is lower
First let us look at the explanation of these bitcoin divergence trading terms:
M shapes on BTCUSD charts
Trading Crypto Interpret Divergence Signal in Crypto Trading? - How Do I Analyze Crypto Divergence Signals?
W Shapes on Bitcoin charts
Trading Crypto Interpret Different Types of Crypto Divergence Signal Trading Signals?
Analyze Divergence Signal in BTCUSD Trading
Trading Crypto Interpret Different Types of Crypto Divergence Signal Trading Signals?
Analyze Divergence Signal in Bitcoin Trading
Trading Crypto Interpret Different Types of Crypto Divergence Signal Trading Signals?
Now that you have known the bitcoin divergence trading terms used to explain divergence bitcoin trading setup. There are two different types of bitcoin trading divergences which are:
- Classic Bitcoin Divergence Signal
- Hidden Bitcoin Divergence Signal
Classic bitcoin divergence trading setup & hidden bitcoin divergence setup are explained on the learn bitcoin trading guides located in the main navigation menu of this learn bitcoin trading site - under topics learn bitcoin trading lessons.
Interpret Divergence Signal Trading Signals
