What's Oil Trading Divergence?

What is Divergence Oil Trading Definition? - Divergence is a crude oil trading setup used by Oil traders - oil divergence trading involves looking at a oil chart & a oil indicator - for example MACD technical indicator.

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

For a 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 Trading MACD indicator.

Example of a Oil Divergence Setup Trade Setup:

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

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

We then draw one line on the oil chart & another line on the MACD oil technical trading technical indicator.

Divergence Oil Trading Signals - What is Divergence Crude Oil Explanation? - What is Divergence Oil Trading Definition?

The oil chart above shows an example of hidden bearish oil trading divergence.

What is Divergence Crude Oil Trading?

In order to trade Crude 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

Divergence Oil Trading Terms Definition: What is Divergence Oil Trading? - What is Oil Trading Divergence?

M shapes on Oil charts dealing with Crude Oil price Highs

W Shapes on Oil charts dealing with Crude Oil price lows

Example of M Shapes on Oil Trade Charts - What is Bearish Divergence?

Examples of W Shapes on Crude Oil Trade Charts - What is Bearish Divergence?

What is Divergence Oil Trading? - What is Oil Divergence? - What is Bearish Oil Trading Divergence? - What's Bullish Oil Divergence? - What is Divergence Crude Oil Explanation? - What is Divergence Oil Trading Definition?