Divergence MASTER-CLASS Part 2.
This is the final part of the Divergence master-class.
We will cover bearish scenarios and shorting.
Let's Go!
This is the final part of the Divergence master-class.
We will cover bearish scenarios and shorting.
Let's Go!
Note-
1. We only look at the value of the Body of the candle and not the wicks.
2. Bearish Divergence only looks at the Highs.
Remember, Bearish divergence is used to find the tops, so look at the Highs only.
1. We only look at the value of the Body of the candle and not the wicks.
2. Bearish Divergence only looks at the Highs.
Remember, Bearish divergence is used to find the tops, so look at the Highs only.
1. Strong Bearish Divergence.
The price makes a Higher High but the oscillator makes a Lower High.
This means that even though the price is moving higher, the average momentum of the look-back period is decreasing.
This is a potential top signal.
The price makes a Higher High but the oscillator makes a Lower High.
This means that even though the price is moving higher, the average momentum of the look-back period is decreasing.
This is a potential top signal.
Trade.
Here is the shame chart explaining the short entry using
1. Short confirmation
2. S/R Break
3. EMA 200 Support
4. Exit on Support Break
Take the time to study it.
Here is the shame chart explaining the short entry using
1. Short confirmation
2. S/R Break
3. EMA 200 Support
4. Exit on Support Break
Take the time to study it.
Here is another set-up I used which luckily caught the exact top, giving a 19% short movement.
Notice the volume expansion.
Notice the volume expansion.
2. Medium Bearish Divergence.
Here the price makes a double top but the oscillator makes a Lower High.
This means that at the same price level, the momentum has decreased.
This is one of my personal favorite setups.
Here the price makes a double top but the oscillator makes a Lower High.
This means that at the same price level, the momentum has decreased.
This is one of my personal favorite setups.
Trade Setup-
Using the same chart, a bearish entry is explained when the support line breaks.
Notice the use of-
1.Bearish Engulfing
2.Retracement
3.Volume
Using the same chart, a bearish entry is explained when the support line breaks.
Notice the use of-
1.Bearish Engulfing
2.Retracement
3.Volume
3. Weak Bearish Divergence
The price makes a higher high but the oscillator makes a double top.
This means that the average momentum isn't ready to go up even as the price goes up.
Simple confirmation break-down setup explained below.
The price makes a higher high but the oscillator makes a double top.
This means that the average momentum isn't ready to go up even as the price goes up.
Simple confirmation break-down setup explained below.
4. Hidden Bearish Divergence.
The price makes a Lower High but the Oscillator makes a Higher High.
This means that the price is going down even after there's an increase in the average momentum in the lookback period.
The price makes a Lower High but the Oscillator makes a Higher High.
This means that the price is going down even after there's an increase in the average momentum in the lookback period.
Trade setup.
This setup, although did not catch the absolute top, but provided a high-profit short entry.
Notice how the accumulation zone break is used as a short trigger.
This setup, although did not catch the absolute top, but provided a high-profit short entry.
Notice how the accumulation zone break is used as a short trigger.
This completes the last part of the divergence master-class for RSI.
We will cover MACD and OBV in near future threads.
This is a very powerful and profitable concept.
READ SEVERAL TIMES. MASTER IT.
All the Best.
We will cover MACD and OBV in near future threads.
This is a very powerful and profitable concept.
READ SEVERAL TIMES. MASTER IT.
All the Best.
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