Types of Bearish Divergence Commodity Trading

Types of Divergence Commodity Trading Definition - Divergence is a commodities trading setup used by Commodity traders - divergence commodity trading involves looking at a commodity chart & a commodity indicator - for example MACD indicator.

To find this divergence commodity trading setup find two chart points which commodity price makes a new swing high or a new swing low but the MACD indicator does not do the same, this commodity signals a divergence between commodity price & MACD technical indicator momentum.

For a divergence commodities setup we look for 2 chart points, two highs that form an M-shape on the commodity chart or 2 lows that form a WShape on the commodities trading chart. Then look for the same M-shape or WShape on the Commodity Trading MACD indicator.

Example of a Divergence Commodity Trade Setup:

In the commodities chart below we spot 2 chart points, point A and point B (swing highs). These 2 chart points form an M-shape on the commodity price chart.

Then using MACD technical indicator we check the highs made by the MACD technical indicator, these are highs that are directly below Chart points marked A & B.

We then draw one line on the commodity chart & another line on the MACD indicator.

Divergence Commodity Signals - Types of Divergence Commodities Definition - Types of Divergence Commodity Trading Definition

The commodity chart above shows example of hidden bearish divergence commodity setup.

hat is Divergence Commodity Trading Types of Divergence Commodity Trading

In order to trade divergence commodity trading signal we look for the following:

• HH : Higher High - 2 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

Divergence Commodity Trading Terms Definition: Different Types of Divergence Commodity Trading - Types of Divergence Commodity Trading

M shapes on Commodities charts dealing with Commodity price Highs

W Shapes on Commodities charts dealing with Commodity price lows

Types of Bearish Divergence Commodities Trading - Types of Bullish Divergence Commodity Trading

Types of Bearish Divergence Commodities Trading - Types of Bullish Divergence Commodity Trading

Types of Divergence Commodities Trading - Types of Bearish Divergence Commodity Trading - Types of Bullish Divergence Commodities Trading - Types of Divergence Commodities Definition - Types of Divergence Commodity Trading Definition