Oil Trading With Divergence on MT4 MT5 PDF Download
Divergence Oil Trading Setup is one of the trade setups used by Oil traders. It involves looking at a oil chart and one more oil indicator. For our example we shall use the MACDoil indicator.
To spot this crude oil trading divergence setup find two chart points at which crude oil price makes a new swing high or a new swing low but the MACD indicator does not, indicating a divergence between crude oil price & momentum.
To look for divergence crude oil setup we look for 2 chart points, two highs that form an M-shape on the oil chart or two lows that form a WShape on the crude oil chart. Then look for the same M-shape or W-Shape on the oil indicator you use to trade.
Example of a Oil Divergence Setup Trade Setup:
In the oil chart below we identify 2 chart points, point A and point B (swing highs). These 2 chart points form an M-shape on the crude oil 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 the Chart points A and B.
We then draw one line on the oil chart & another line on the MACD oil technical trading technical indicator.
Drawing Divergence Oil Trading Lines
The oil chart above shows example of one of the 4 types of crude oil trading divergence setups, the one crude oil trading divergence setup above is known as hidden bearish crude oil trading divergence setup, one of the best type to trade. Types of oil trading divergences are covered in the next learn oil tutorial lesson.
How to spot crude oil trading divergence setups
In order to spot Oil Trading divergence signal we look for 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 crude oil trading divergence trading terms:
M-shapes dealing with Oil price Highs
W Shapes dealing with Crude Oil price lows
Example of M Shapes on Oil Trading Charts
Examples of W Shapes on Crude Oil Charts
Now that you have learned the crude oil trading divergence trading terms which are used to explain divergence oil set-up. Let us look at the 2 types of divergences and how to trade these oil chart setups.
There two types are:
- Classic Divergence Oil Trading Setups
- Hidden Divergence Oil Trading Setups
These two set ups are explained on the following guides below
Classic Divergence Oil Trading Setup
Hidden Divergence Oil Trading Setup
Oil Trading With Divergence on MT4 MT5 PDF Download - Oil Trading With Divergence on MT4 MT5 Oil Trading Platform PDF Free Download - MetaTrader 4 Oil Trading Platform MT5 Divergence Oil Tutorial.
