What's Stochastic Oil Trading Divergence?
Stochastic Divergence Oil Trading is one of the oil trading strategy used by online crude oil traders to analyze oil chart crude oil price movement. Stochastic Oil Trading Divergence involves looking at a oil chart and one more crude oil technical indicator - Stochastic indicator. For our this crude oil trading divergence tutorials we shall use the Stochastic indicator - Stochastic Crude Oil Trading Divergence.
To spot this Stochastic oil divergence trading setup find two oil chart points at which crude oil price makes a new swing high or a new swing low but the Stochastic technical indicator does not do the same, thus indicating that there's a divergence between the crude oil price & momentum.
Stochastic Oil Divergence Example:
In the oil chart below we identify two crude oil chart points, chart point Marked A and chart point Marked B (swing highs)
Then using Stochastic indicator we check the highs made by the Stochastic 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 and another line on the Stochastic indicator.
Stochastic Oil Divergence Meaning - Bullish Crude Oil Trading Divergence Stochastic - Bearish Divergence Stochastic - Stochastic Divergence Guide
How to trade Stochastic oil divergence
In order to trade Stochastic oil divergence setup we look for the following set-ups:
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 example of these oil trading divergence terms
Stochastic Divergence Explanation - Oil Stochastic Divergence Guide
Stochastic Crude Oil Trading Divergence Definition - Stochastic Divergence Oil Tutorial - Stochastic Oil Trading Divergence Strategy Course - Stochastic Divergence Oil Trading Tutorial
There are two different types of oil trading Stochastic divergence setups:
- Stochastic Classic Divergence
- Stochastic Hidden Divergence
