Types of Divergence is an important topic to understand the trend of the stock or index. There are 2 types of divergence i.e. regular divergence and hidden divergence. These are further divided into 2 types i.e. bullish and bearish divergence.
Regular divergence means trend reversal. Regular bullish divergence if formed when price action form lower lows and the indicator or oscillator is higher lows. It means the end of downtrend and start of an uptrend. The reason being price and the indicator should move in the same direction.
In bearish divergence, the price action is higher highs and indicator is lower highs. It is formed during an uptrend and means the end of the uptrend i.e. trend reversal or beginning of a downtrend.
With the help of regular divergence, you can find out the entry and exit points i.e. top and bottom of the stock or index. In layman terms, the sustainability of the trend.
The 2nd type of divergence i.e. hidden divergence is formed inside the current or existing trend. It means a continuation of an existing trend. Hidden bullish divergence is the result of higher lows in price action and lower lows of the indicator. It means a continuation of the uptrend.
Hidden bearish divergence is formed when price action is lower highs and indicator is higher highs during a downtrend.
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Types of Divergence - Regular and Hidden Divergence | Part 2 (HINDI) trading screen | |
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| How-to & Style | Upload TimePublished on 22 Jun 2018 |
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