What's Divergence Oil Trading?

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

To find this divergence oil trading set up find two chart points which crude oil price makes a new swing high or a new swing low but the MACD 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 trading technical indicator.

Example of a Divergence Oil 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 the highs made by the MACD oil trading 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 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 divergence oil trading setup.

What is Divergence Crude Oil Trading?

In order to trade divergence oil trade signal we will 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

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

M shapes on Oil charts dealing with Crude Oil price Highs

W Shapes on Oil charts dealing with Oil price lows

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

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

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