Types of Stocks Trading Divergence

Types of Stocks Trading Divergence Definition - Divergence is a stocks setup used by Stocks traders - Stocks Trading Divergence Stocks Setups involves looking at a stocks chart and a stocks indicator - for example MACD indicator.

To find this Stocks Trading Divergence Stocks Setups setup find 2 chart points which stocks price makes a new swing high or a new swing low but the MACD indicator does not do the same, this stocks signals a divergence between stocks price & MACD technical indicator momentum.

For a Stocks Trading Divergence Stocks Setups setup we look for 2 chart points, two highs which form an M shape on the stock trading chart or two lows that form a W-Shape on the stock trading chart. Then look for same M-shape or W Shape on the Stocks Trading MACD indicator.

Example of a Stock Trading Divergence Trade Setup:

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

Then using stocks trading MACD technical indicator we check the highs made by the MACD technical indicator, these are highs that are direct below Chart points marked A and B.

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

Stocks Trading Divergence Stocks Setups Signals - Types of Stocks Divergence Explanation - Types of Stocks Trading Divergence Definition

The stocks chart above shows example of hidden bearish Stocks Trading Divergence setup.

hat is Stocks Trading Divergence Stocks Setups Types of Stocks Trading Divergence

In order to trade Stocks Trading Divergence Stocks Setups trading signal we look for the following:

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

Stocks Trading Divergence Stocks Setups Terms Definition: Different Types of Stocks Trading Divergence Stocks Setups - Types of Stocks Trading Divergence

M shapes on Stocks charts dealing with Stock price Highs

W Shapes on Stocks charts dealing with Stock price lows

Example of M Shapes on Stock Charts - Types of Bearish Stocks Trading Divergence Stocks Setups

Examples of W Shapes on Stock Charts - Types of Bearish Stocks Trading Divergence Stocks Setups

Different Types of Stocks Trading Divergence Stocks Setups - Types of Stocks Trading Divergence - Types of Bearish Stocks Trading Divergence Stocks Setups - Types of Bullish Stocks Trading Divergence Stocks Setups - Types of Stocks Divergence Explanation - Types of Stocks Trading Divergence Definition