Trading with Divergences- Everything You Need To Know About Divergences + (Free Divergence Spreadsheet)

Divergences- Introduction

>>>Bonus: Get Free Divergence Spreadsheet<<<

What is divergence and how do you trade with divergences?

Types of Divergences- Bullish Divergence

Bearish Divergences

Hidden Divergences

Hidden Bullish Divergence

Hidden Bearish Divergence

Types of Divergences- Summary

  • End of a down trend.
  • Second bottom.
  • Price makes new Lower Low, but oscillator makes Higher Low.
  • Trend changes to the upside.
  • End of an uptrend.
  • Second top.
  • Price makes Higher High, but oscillator makes Lower High.
  • Trend changes to the downside.
  • During an uptrend
  • Once price makes a Higher Low, but oscillator makes a Lower Low.
  • The trend should continue to the upside.
  • During a downtrend.
  • Once price makes a Lower High, but oscillator makes Higher High.
  • The trend should continue to the downside.

Trading With Divergences

Less Known and Still Great Indicators- Stochastic RSI

Examples- Trading with Divergences

  1. This is considered normal Bearish divergence. You would not have seen that as clearly with either the RSI or Stochastics, but it’s obvious with Stochastic RSI.
  2. Hidden Bullish Divergence. Again, it looks like the standard RSI and Stochastic are just following the trend, is it a coincidence that the Stochastic RSI shows that hidden divergence right before another move up? No.

More on Stochastic RSI and Trading With Divergences

When Divergences Carry On For Too Long and Some Common Mistakes When Trading With Divergences

Wait For the Pull Back

Trends and Trading With Divergences




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Colibri Trader

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