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Stochastic Oscillator Bullish XAUUSD Trading Divergence and Bearish Divergence XAUUSD

Divergence xauusd is one of the xauusd signals that can be generated when using the stochastic oscillator xauusd indicator.


Divergence xauusd is a signal that a rally or retracement is losing steam and is likely to reverse. It means that the last buyers or last sellers are pushing the gold price in one way while the majority of other xauusd traders have stopped trading in that direction and are cautious of a xauusd price correction or retracement.



There are 4 types of xauusd divergence trading setups

Example 1: Classic XAUUSD Trading Bullish Divergence


A XAUUSD Classic Bullish Divergence in the stochastic oscillator indicator and the gold price is followed by a rise in xauusd price.

Stochastic Oscillator XAUUSD Indicator Classic XAUUSD Trading Bullish Divergence

Stochastic Oscillator XAUUSD Indicator Classic XAUUSD Trading Bullish Divergence


When the gold price is making new lows the Stochastic xauusd indicator is not moving past its previous lows it is an indication that the downward xauusd trend is about to reverse and a bullish xauusd rally is likely to occur.



In the xauusd example above the gold price set a new low but it was not coupled with a new low in the measure of Stochastic oscillator xauusd indicator, when gold price formed a new low then the stochastic xauusd indicator should have followed suit, but the stochastic indicator did not therefore the xauusd classic divergence trading setup.


XAUUSD Trading classic divergence trading setup is even stronger because there is combination of a divergence xauusd trade setup and then followed by a rise above the 20% indicator level. This combines the Overbought and Oversold levels with this xauusd divergence trading setup.


Example 2: Classic XAUUSD Trading Bearish Divergence


A Classic XAUUSD Trading Bearish Divergence trading setup in the stochastic oscillator xauusd indicator and the gold price is followed by a drop in xauusd price.

Stochastic Oscillator XAUUSD Indicator Classic XAUUSD Trading Bearish Divergence

Stochastic Oscillator XAUUSD Indicator Classic XAUUSD Trading Bearish Divergence


When gold price is making new highs but the Stochastic oscillator xauusd indicator is not moving beyond its previous high it is an indication the upward xauusd trend will reverse and that a xauusd bearish divergence trade setup will follow.


This classic xauusd bearish divergence trade setup is even stronger because there is a combination of a xauusd divergence with a dip below the overbought 80 level.


Example 3: Hidden XAUUSD Trading Bullish Divergence


Hidden XAUUSD Trading Bullish Divergence trade setup signifies a retracement in an upward gold trend. This xauusd hidden divergence trading setup is the best type of xauusd divergence setup to trade, because you are not trading a xauusd price reversal, but you are trading within the direction of the XAUUSD trend.

Stochastic Oscillator XAUUSD Indicator Hidden XAUUSD Trading Bullish Divergence

Stochastic Oscillator XAUUSD Indicator Hidden XAUUSD Trading Bullish Divergence


Even though, the stochastic oscillator xauusd indicator made a lower low the gold price low was higher than the previous low (higher low). This means that even though the xauusd sellers made a good attempt to push gold price down as indicated by the stochastic indicator, this was not reflected on the xauusd price, and the gold price did not make a new low. This is the best place to open a buy xauusd trade, since it is even in an upward xauusd trend there is no need to wait for a confirmation xauusd signal, because you are buying in an upward gold trend.



Example 4: Hidden XAUUSD Trading Bearish Divergence


Hidden XAUUSD Trading Bearish Divergence trading setup signifies a retracement in a downward gold trend.

Stochastic Oscillator XAUUSD Indicator Hidden XAUUSD Trading Bearish Divergence

Stochastic Oscillator XAUUSD Indicator Hidden XAUUSD Trading Bearish Divergence


Hidden xauusd bearish divergence xauusd setup is the best type of divergence to trade, because you are not trading a xauusd price xauusd trend reversal, but you are trading within the direction of the gold trend. This is the best place to open a sell xauusd trade, since it is even in a downward xauusd trend there is no need to wait for a confirmation xauusd signal, because you are selling in a downward gold trend.

 

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