XAUUSD Trading Divergence Strategy

Divergence XAUUSD Trading Definition - Divergence xauusd is one of the xauusd setups used by XAUUSD traders. Divergence xauusd involves looking at a xauusd chart and one more xauusd indicator. For our divergence trading example we shall use the MACD gold technical indicator.

To spot this xauusd divergence setup find two chart points at which gold price makes a new swing high or a new swing low but the MACD indicator does not, indicating a xauusd divergence between gold price & momentum.

To look for divergence xauusd signal we look for 2 chart points, 2 highs that form an M shape on the xauusd chart or two lows that form a WShape on the gold chart. Then look for the same M-shape or W-Shape on XAUUSD indicator that you use to trade - for example RSI indicator, MACD indicator or Stochastic Oscillator indicator.

Example of a Gold Trading Divergence Trade Setup:

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

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

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

Drawing Divergence XAUUSD Lines - XAUUSD Divergence Strategy - XAUUSD Trading Divergence XAUUSD Entry & Exit

The xauusd chart above shows example of one of the 4 types of xauusd divergence setup, the one above is known as hidden bearish xauusd trading divergence. Types of xauusd divergence setups are covered in the next learn xauusd lesson.

How to spot divergence xauusd setup

In order to spot XAUUSD Trading divergence signal we look for the following:

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

First let us look at the illustrations of these divergence xauusd terms:

M shapes on XAUUSD charts dealing with Gold price Highs

W Shapes on XAUUSD charts dealing with Gold price lows

Example of M Shapes on XAUUSD Charts

Examples of W Shapes on Gold Charts

Now that you've learned the divergence xauusd terms that are used to explain divergence set-up. Let us look at the 2 types of xauusd divergences and how to trade these gold trading divergence chart setups.

The two gold divergence types which are:

1. Classic XAUUSD Trading Divergence
2. Hidden XAUUSD Trading Divergence

These two xauusd divergence setups - classic divergence trading & hidden divergence trading are described on the following learn xauusd guides in the xauusd trading lessons tutorials on this website located at the navigation menu under the topics learn xauusd lessons.