What is Divergence Stocks?
What's Divergence Stocks Trading Definition? - Divergence is a stocks setup used by Stocks traders - divergence stocks involves looking at a stocks chart & a stocks indicator - for example MACD indicator.
To find this divergence stocks 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 divergence stocks setup we look for two chart points, 2 highs which form an M shape on the stock trading chart or two lows that form a WShape on the stock chart. Then look for same M-shape or W-Shape on the Stocks MACD technical indicator.
Example of a Divergence Stocks Trade Setup:
In the stocks chart below we spot 2 chart points, point A & 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 indicator.
Divergence Stocks Signals - What is Divergence Stocks Explanation? - What's Divergence Stocks Trading Definition?
The stocks chart above shows an example of hidden bearish divergence stocks trading setup.
What's Divergence Stocks?
In order to trade divergence stocks signal we 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 Stocks Terms Definition: What is Divergence Stocks? - What is Divergence Stocks?
M shapes on Stock charts dealing with Stocks price Highs
W Shapes on Stock charts dealing with Stocks price lows
Example of M Shapes on Stock Charts - What is Bearish Divergence?
Examples of W Shapes on Stocks Charts - What is Bearish Divergence?
What's Divergence Stocks? - What is Divergence Stocks? - What is Bearish Stock Divergence Trading? - What is Bullish Stock Divergence Trading? - What is Divergence Stocks Explanation? - What's Divergence Stocks Trading Definition?
