Divergence Trading PatternsDIVERGENCES are used to forecast an upcoming Price Reversal or Continuation.
There are 4 different types of Divergences and the first ones are Regular Bullish and Regular Bearish Divergences.
What are they?
Regular Divergences are when the price movement is contrary to the indicator movement. Signal for an upcoming Price Reversal, trend is about to change.
Then the second ones are Hidden Bullish and Hidden Bearish Divergences.
Hidden Divergences are signal of Trend Continuation. Meaning that the price continues to move in it's current direction.
If you have learned this method already this is a great reminder and works very well as cheat sheet. But if you are a learner then the chart is explaining very simple how you can spot them. You should take time and effort to learn this. It does not take long before you start spotting different kind of divergences.
You can use one of following oscillators to spot the divergences. (In the end it does not really matters which one you use).
MACD
RSI
CCI + BB
etc there are more but here are few you to get started.
Any questions or need help? Feel free to leave comments and feedback!
Yarr!
Regulardivergence
BEARISH EURGBP 1 Hour: Bullish BAT pattern at marketNov 12 2015: BEARISH EURGBP 1 Hour: Bullish BAT pattern at market
(Analysis Based on 1 hour chart)
Observations
1 Short term down channel
2. RSI oversold at swing low
3. Price at down channel mid-line
4.BAT at pattern at market
5. RSI hidden divergence
6. RSI regular divergence
NOTE: Wait for price action to confirm the importance of these levels.
If you find this information useful. Please hit the LIKE button.