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Flashcards in High School Deck (14)
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1

Using divergence trading can be useful in spotting a?

weakening trend or reversal in momentum.

2

What are TWO types of divergence:

Regular and Hidden.

3

What is a regular divergence?

A regular divergence is used as a possible sign for a trend reversal.

4

What are two types of regular divergences:

bullish and bearish.

5

If price is making lower lows (LL), but the oscillator is making higher lows (HL), this is considered to be?

regular bullish divergence. This normally occurs at the end of a DOWNTREND.

6

In a Regular Bullish Divergence after establishing a second bottom, if the oscillator fails to make a new low, it is likely that?

the price will rise, as price and momentum are normally expected to move in line with each other.

7

In a Regular Bearish Divergence f the price is making a higher high (HH), but the oscillator is lower high (LH), then you have?

a regular bearish divergence. This type of divergence can be found in an UPTREND. After price makes that second high, if the oscillator makes a lower high, then you can probably expect price to reverse and drop.

8

The regular divergence is best used when trying to pick

tops and bottoms.

9

What’s a hidden divergence?

Hidden bullish divergence happens when price is making a higher low (HL), but the oscillator is showing a lower low (LL). This can be seen when the pair is in an UPTREND.

10

In a Hidden Bullish Divergence Once price makes a higher low (HL), look and see if the oscillator does the same. If it doesn’t and makes a lower low (LL), then?

we’ve got some hidden divergence in our hands.

11

What is Hidden Bearish Divergence?

This occurs when price makes a lower high (LH), but the oscillator is making a higher high (HH).

12

Regular divergences = signal possible?

trend reversal.

13

Hidden divergences = signal possible?

trend continuation.

14

In order for divergence to exist, price must have either formed one of the following:

Higher high than the previous high
Lower low than the previous low
Double top
Double bottom