Commodity Classic Bullish Divergence & Commodity Hidden Bullish Divergence

When it comes to bullish divergence there are 2 bullish divergence trading setups mainly traded in the commodities trading market - these commodity trading setups are; Commodity Classic Bullish Divergence and Commodity Trading Hidden Bullish Divergence.

Commodities Classic Bullish Divergence

Classic bullish divergence set-up forms when price is forming lower lows (LL), but oscillator is making higher lows (HL). The example illustrated and shown below shows a picture of this commodity trading setup.

Commodity Trading Classic Bullish Divergence - Bullish Divergence Commodity Trading

This example uses MACD indicator as a Commodity Trading divergence indicator.

From the above bullish divergence example the commodity price made a lower low(LL) but the indicator made a higher low(HL), this shows there is a divergence between the commodity price & the indicator. This signal warns of a possible commodity trend reversal.

Classic bullish diverging signal warns of a possible change in commodity trend from down to up. This is because even though the commodity price went lower the volume of sellers who pushed the commodity price lower was less as illustrated by the MACD technical indicator. This indicates underlying weakness of the downwards Commodity Trading trend.

Commodity Trading Hidden Bullish Divergence

This bullish divergence setup happens when price is making a higher low ( HL ), but the oscillator (indicator) is showing a lower low (LL). To remember them easily think of them as W-shapes on Chart patterns. It occurs when there is a retracement in an upwards Commodity Trading trend.

The bullish divergence example shown below shows an image of this commodity trading setup, from the image the commodity price made a higher low (HL) but the indicator made a lower low (LL), this shows that there was a diverging signal between the commodity price and indicator. This signal shows that soon the commodities trading market up commodity trend is going to resume. In other words it shows this was just a retracement in an upwards commodity trend.

Commodities Trading Hidden Bullish Divergence- Bullish Divergence Commodity Trading

This bullish divergence confirms that a retracement move is complete and indicates underlying strength of an upward commodities trend.