How to REALLY Trade Divergences (One of My Favorite Entries)This tutorial might be short, but it is packed with potent information on how to REALLY trade divergences.
Divergences are one of the BEST ways to catch market reversals. However, from what I have seen, most people do not have a real process for determining when a divergence is actually confirmed/triggered, and then how to determine targets based on the divergence setup.
In other words, most people don't have a plan for trading divergence.
This video will give you a full plan (Setup/Trigger/Follow Through) for trading divergences.
I give full credit to Jake Bernstein, as this is a concept that I learned from him. He is one of the all time greats, and very worth your time to check out.
I hope you found this video insightful.
Have a great week.
Divergencetrading
How to Confirm a DivergenceI get a lot of messages from you guys talking about how #diivergences seem to play out or not get initiated or that you're having problems entering A #divergence trade.
In this video I'm presenting you a reminder of one of the steps you need to use and it is the the confirmation step that you need to use for confirming whether a divergence is actually going to start going in your favor.
By that I mean that you have already found the divergence and you're simply waiting to enter on the trade because as you should know by now just because you see a divergence doesn't mean it triggers you to start trading in a direction.
Finding the divergence is only step one but finding the entry is based off of the structure in price action that I have outlined in this video idea.
In this video I'm simply using the RSI to find a bullish divergence based off of the difference in bearish price action and you can see clearly how I implement drawing a area around the start of the divergence and wait for price to reach that area. If price never reaches that area then I do not trade bullish according to the bullish divergence instead you simply ignore the divergence and carry on with the rest of your #priceaction #trading.
Time divergence trainingPlease note that the price was able to move from the ceiling during the time period specified in the box, but in the same time box, it could not return that way and it was filled within time. What it means in the market is that the power of buyers is more and there is a positive time divergence.
When a divergence isn't a divergence and price winsA fellow trader here on Trading View needed some help with a trade he is taking.
Commonly when an RSI makes a new LOW and price makes an opposing HIGH this is called a "Bearish Divergence"
When this happens, its expected that price will follow and make new Lows or start moving down.
But what happens when price continues to move up?
Why would it go against the momentum of the all mighty RSI?
How is it possible that price can reject what the RSI wants to do?
Well the answer is VOLUME and who is in control of it. The Bulls or the Bears...and whomever is in control, will always win.
In this video you'll see something else to look out for when trading divergences so you can predicts which way price will breakout.
How To Trade Divergence
Divergence simply means separation.. When two similar things things---get separated and start going different directions, you have to consider which direction to follow. That's exactly the concept of divergence. When trading, and you spot a divergence, you want to be sure to understand what they are trying to tell you. In this video, I explain the concept of divergences, how to trade them and what to do when you sight one. Be sure to like, follow and comment.
I want to see those div trades!